Critical Analysis: American Defense Systems (OTCMKTS:ADFS) & BRP (OTCMKTS:DOOO)

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BRP (NASDAQ:DOOO) and American Defense Systems (OTCMKTS:ADFS) are both auto/tires/trucks companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, dividends, analyst recommendations, earnings, risk, valuation and institutional ownership.

Risk & Volatility

BRP has a beta of 2.06, suggesting that its share price is 106% more volatile than the S&P 500. Comparatively, American Defense Systems has a beta of 1.46, suggesting that its share price is 46% more volatile than the S&P 500.

Valuation & Earnings

This table compares BRP and American Defense Systems’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BRP $4.02 billion 1.08 $175.13 million $2.38 20.21
American Defense Systems N/A N/A N/A N/A N/A

BRP has higher revenue and earnings than American Defense Systems.

Insider & Institutional Ownership

24.3% of BRP shares are held by institutional investors. 19.3% of American Defense Systems shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares BRP and American Defense Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BRP 5.66% -73.58% 9.95%
American Defense Systems N/A N/A N/A

Analyst Recommendations

This is a summary of recent recommendations for BRP and American Defense Systems, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BRP 0 1 5 0 2.83
American Defense Systems 0 0 0 0 N/A

BRP currently has a consensus price target of $49.03, suggesting a potential upside of 1.93%. Given BRP’s higher probable upside, equities research analysts plainly believe BRP is more favorable than American Defense Systems.

Summary

BRP beats American Defense Systems on 7 of the 9 factors compared between the two stocks.

BRP Company Profile

BRP Inc., together with its subsidiaries, designs, develops, manufactures, distributes, and markets powersport vehicles and marine products worldwide. It operates through two segments, Powersports and Marine. The company offers all-terrain, side-by-side, and three-wheeled vehicles; seasonal products consisting of snowmobiles and personal watercraft; and propulsion systems comprising engines for outboard and jet boats, karts, motorcycles, and recreational aircraft. It also provides parts, accessories, and clothing, as well as PAC and other services. BRP Inc. sells its products through a network of independent dealers and distributors, as well as to original equipment manufacturers under the Can-Am, Ski-Doo, Lynx, Sea-Doo, Evinrude, Alumacraft, Manitou, and Rotax brand names. The company was formerly known as J.A. Bombardier (J.A.B.) Inc. and changed its name to BRP Inc. in April 2013. BRP Inc. was founded in 1937 and is headquartered in Valcourt, Canada.

American Defense Systems Company Profile

American Defense Systems, Inc., together with its subsidiaries, engages in the design and supply of transparent and opaque armor solutions for military and commercial applications. It offers crew protection kits that provide armor protection of operator compartments; VistaSteel transparent armor, a laminated glass that provides defensive barrier to protect against firearms, physical attack, and explosive blasts; VistaSteel opaque armors; lightweight armor systems; and VistaGuard windows, which are forced entry blast resistant windows, window frames, and transparent armor assemblies used to mitigate forced entry, ballistic, and terrorist threats in high visibility targets. The company also provides portable transparent ballistic shield, a bullet-resistant transparent mobile shield; heated ballistic ship windows; and hardware products, such as hinges, rotary and slam latches, combat locks, and egress windows. Its armor solutions for construction equipment, and tactical and non-tactical transport vehicles are designed to protect their occupants from landmines, hostile fire, and improvised explosive devices. In addition, the company offers engineering and consulting services; and develops and installs detention and security hardware, entry control and monitoring systems, intrusion detection systems, and security glass. Its products are used in transport and fighting vehicles, construction equipment, sea craft, and various fixed structures, which require ballistic and blast attenuation. American Defense Systems, Inc. serves various branches of the United States military, including the United States Department of Defense; and other United States government, law enforcement, and correctional agencies, as well as private sector customers. The company was founded in 1994 and is headquartered in Lillington, North Carolina.

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