La-Z-Boy (NYSE: LZB) and Stanley Furniture (NASDAQ:STLY) are both small-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Institutional & Insider Ownership

86.8% of La-Z-Boy shares are owned by institutional investors. Comparatively, 29.7% of Stanley Furniture shares are owned by institutional investors. 3.2% of La-Z-Boy shares are owned by company insiders. Comparatively, 28.6% of Stanley Furniture shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility and Risk

La-Z-Boy has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500. Comparatively, Stanley Furniture has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500.

Earnings & Valuation

This table compares La-Z-Boy and Stanley Furniture’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
La-Z-Boy $1.54 billion 0.78 $154.51 million $1.70 14.69
Stanley Furniture $43.64 million 0.41 -$3.31 million ($0.20) -5.99

La-Z-Boy has higher revenue and earnings than Stanley Furniture. Stanley Furniture is trading at a lower price-to-earnings ratio than La-Z-Boy, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations and price targets for La-Z-Boy and Stanley Furniture, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
La-Z-Boy 0 3 1 0 2.25
Stanley Furniture 0 0 0 0 N/A

La-Z-Boy presently has a consensus target price of $30.33, suggesting a potential upside of 21.45%. Given La-Z-Boy’s higher possible upside, analysts plainly believe La-Z-Boy is more favorable than Stanley Furniture.

Dividends

La-Z-Boy pays an annual dividend of $0.44 per share and has a dividend yield of 1.8%. Stanley Furniture does not pay a dividend. La-Z-Boy pays out 25.9% of its earnings in the form of a dividend.

Profitability

This table compares La-Z-Boy and Stanley Furniture’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
La-Z-Boy 5.45% 14.18% 9.73%
Stanley Furniture -6.38% -18.33% -10.44%

Summary

La-Z-Boy beats Stanley Furniture on 12 of the 14 factors compared between the two stocks.

About La-Z-Boy

La-Z-Boy Incorporated manufactures, markets, imports, exports, distributes and retails upholstery furniture products. The Company also imports, distributes and retails accessories and casegoods (wood) furniture products. The Company’s segments include the Upholstery segment, the Casegoods segment and the Retail segment. The Company is the producer of reclining chairs and manufacturer/distributor of residential furniture in the United States. The Company sells its products, primarily in the United States and Canada, as well as internationally, to furniture retailers and directly to consumers through stores that it owns and operates. The Company has a network of approximately 340 La-Z-Boy Furniture Galleries stores and over 560 Comfort Studio locations. The Company owns approximately 120 of the La-Z-Boy Furniture Galleries stores. The Company’s other brands include England, Kincaid, American Drew and Hammary.

About Stanley Furniture

Stanley Furniture Company, Inc. is a design, marketing and sourcing resource in the wood residential furniture market. The Company’s segment is sale of residential wood furniture products. The Company markets its brands through a network of brick-and-mortar furniture retailers, online retailers and interior designers around the world. The Company’s products are marketed under the Stanley Furniture brand, but also under sub-brands, including Coastal Living and Stone & Leigh. The Company’s products are marketed as wood residential home furnishings and include a range of offerings for the home, including dining, bedroom, living room, home office, home entertainment, accent items, and nursery and youth furniture. The Company provides products in a range of wood species and finishes. The Company’s product is sourced from independently owned factories in Southeast Asia, primarily in Vietnam.

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