Financial Contrast: Cricut (NASDAQ:CRCT) vs. Garmin (NYSE:GRMN)

Cricut (NASDAQ:CRCT) and Garmin (NYSE:GRMN) are both consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Profitability

This table compares Cricut and Garmin’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cricut	12.71%	24.57%	15.42%
Garmin	24.47%	20.95%	17.06%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Cricut and Garmin, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cricut	4	1	0	1	1.67
Garmin	0	4	2	2	2.75

Cricut presently has a consensus target price of $4.07, suggesting a potential downside of 36.31%. Garmin has a consensus target price of $310.17, suggesting a potential upside of 10.99%. Given Garmin’s stronger consensus rating and higher possible upside, analysts clearly believe Garmin is more favorable than Cricut.

Institutional & Insider Ownership

19.6% of Cricut shares are owned by institutional investors. Comparatively, 81.6% of Garmin shares are owned by institutional investors. 16.5% of Cricut shares are owned by insiders. Comparatively, 14.8% of Garmin shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Cricut and Garmin”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cricut	$689.79 million	1.94	$76.71 million	$0.43	14.85
Garmin	$7.25 billion	7.44	$1.66 billion	$9.70	28.81

Garmin has higher revenue and earnings than Cricut. Cricut is trading at a lower price-to-earnings ratio than Garmin, indicating that it is currently the more affordable of the two stocks.

Dividends

Cricut pays an annual dividend of $0.20 per share and has a dividend yield of 3.1%. Garmin pays an annual dividend of $4.20 per share and has a dividend yield of 1.5%. Cricut pays out 46.5% of its earnings in the form of a dividend. Garmin pays out 43.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Garmin has increased its dividend for 8 consecutive years.

Risk and Volatility

Cricut has a beta of 0.25, suggesting that its share price is 75% less volatile than the S&P 500. Comparatively, Garmin has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500.

Summary

Garmin beats Cricut on 15 of the 18 factors compared between the two stocks.

About Cricut

Cricut, Inc. engages in the design, marketing, and distribution of a creativity platform that enables users to turn ideas into professional-looking handmade goods. It operates through three segments: Connected Machines, Subscriptions, and Accessories and Materials. The company offers connected machines, design apps, and accessories and materials for users to create personalized birthday cards, mugs, T-shirts, and large-scale interior decorations. Its connected machines include Cricut Joy family for personalization, organization, and customization; Cricut Explore family for cutting, writing, and scoring; Cricut Maker family for cutting, writing, scoring, and adding decorative effects to various materials, such as paper, vinyl, iron-on vinyl, pens, and others; and Cricut Venture for cutting, writing, and scoring large-format projects at professional speeds. The company also provides Cricut Access and Cricut Access Premium subscription offerings, and in-app purchases; and a software that integrates its connected machines and design apps comprising Cricut Joy App, Design Space, and other design apps. In addition, it offers a range of accessories and materials, such as Cricut EasyPress, Cricut Mug Press, hand tools, machine replacement tools and blades, and project materials. The company offers its products through its third-party brick-and-mortar and online retail partners; and its website cricut.com, as well as through a network of distributors. It operates in the United States, Canada, the United Kingdom, Ireland, Australia, New Zealand, and Western Europe, as well as the Middle East, Latin America, South Africa, and Asia. The company was formerly known as Provo Craft & Novelty, Inc. and changed its name to Cricut, Inc. in March 2018. The company was incorporated in 1969 and is headquartered in South Jordan, Utah.

About Garmin

Garmin Ltd. designs, develops, manufactures, markets, and distributes a range of wireless devices worldwide. Its Fitness segment offers running and multi-sport watches; cycling products; smartwatch devices; scales and monitors; and fitness accessories. This segment also provides Garmin Connect and Garmin Connect Mobile, which are web and mobile platforms where users can track and analyze their fitness, activities and workouts, and wellness data; and Connect IQ, an application development platform. The company's Outdoor segment offers adventure watches, outdoor handhelds and satellite communicators, golf devices, consumer automotive devices, and dog devices, as well as InReach and Gramin response communication device. Its Aviation segment designs, manufactures, and markets various aircraft avionics solutions, including integrated flight decks, electronic flight displays and instrumentation, navigation and communication products, automatic flight control systems and safety-enhancing technologies, audio control systems, engine indication systems, traffic awareness and avoidance solutions, ADS-B and transponders, weather information and avoidance solutions, datalink and connectivity solutions, and various services. The company's Marine segment provides chartplotters and multi-function displays, cartography products, fishfinders, sonar products, autopilot systems, radars, compliant instrument displays and sensors, VHF communication radios, handhelds and wearable devices, sailing products, audio products and accessories, digital switching products, and trolling motors. Its Auto segment offers embedded domain controllers and infotainment units; and software, map database, cameras, wearables, and automotive solutions. The company sells its products through independent retailers, dealers, distributors, installation and repair shops, and original equipment manufacturers, as well as online webshop. Garmin Ltd. was founded in 1989 and is based in Schaffhausen, Switzerland.