Sturm, Ruger & Company (RGR), Smith & Wesson Holding Corporation (SWHC): Which Firearm Stock Should You Pick

Is Sturm, Ruger alone?

Naturally if firearms are being sold at a record rate, the demand for ammunition should be off the roof. This is why ammunition manufacturer Olin Corporation (NYSE:OLN). recently reported a 24.2% YoY increase in its quarterly sales, coupled with a 4.6 % quarterly increase in its net income YoY. As a result, its shares have risen by 25% over the last year.

But its relatively mediocre growth rate can be attributed to the fact that procuring ammunition is still difficult. And given the current firearm-related rage amongst the general public, I don’t think that its availability will become any greater.

Final words

With that in mind, I think investors should stick to Sturm, Ruger & Company. Its product line incurs relatively lower risks of domestic obsolescence, which somewhat offers a relatively stable growth trajectory. And apart from that, its shares carry a hefty yield of 4.1%. In my opinion, Sturm, Ruger would make a great income growth stock for medium-term investors.

The article Which Firearm Stock Should You Pick originally appeared on Fool.com and is written by Piyush Arora.

Piyush Arora has no position in any stocks mentioned. The Motley Fool owns shares of Sturm, Ruger & Company. Piyush is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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