While you wait for the share price to regain its former heights (shares tumbled to a low of $40 after the tragedy in Newtown, Conn.) you'll be earning a $1.53-a-year dividend, which represents about a 3.56% yield-to-price if shares are purchased at $43. This is from a company with no debt, total cash (most-recent-quarter) of over $105 million and a dividend yield which represents a sustainable payout ratio of only 34%. It appears the fear of new gun-control legislation and possible limitations on gun and ammo sales has been depressing shares of Sturm and Smith & Wesson (SWHC - Get Report). Those fears are overblown, in my opinion, and the daily evidence is both companies are seeing sales skyrocket. What do you think that will do for EPS and revenue during the current quarter? The answer is self-evident. The share price of SWHC has retreated to levels we haven't seen since last summer. This in spite of the company's skyrocketing quarterly revenue-per-share and its diluted EPS growth. Again, let the chart give you the powerful picture. SWHC data by YCharts
Smith & Wesson's price as of Thursday is only $8.25, which represents a trailing PE of less than 10 and a forward (one-year) PE of less than 9. Its price-to-earnings-to-growth (PEG) ratio has dropped to 0.35, an indicator that SWHC is quite oversold.