Hooker Furniture (NASDAQ: HOFT) and Select Comfort (NASDAQ:SNBR) are both small-cap cyclical consumer goods & services companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, institutional ownership, dividends, analyst recommendations, valuation, profitability and earnings.

Volatility & Risk

Hooker Furniture has a beta of 0.64, indicating that its stock price is 36% less volatile than the S&P 500. Comparatively, Select Comfort has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500.

Dividends

Hooker Furniture pays an annual dividend of $0.48 per share and has a dividend yield of 1.0%. Select Comfort does not pay a dividend. Hooker Furniture pays out 18.6% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Hooker Furniture and Select Comfort’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hooker Furniture $577.22 million 1.00 $25.28 million $2.58 19.38
Select Comfort $1.31 billion 1.07 $51.41 million $1.41 24.96

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for Hooker Furniture and Select Comfort, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hooker Furniture 0 0 0 0 N/A
Select Comfort 1 3 3 0 2.29

Select Comfort has a consensus price target of $33.40, indicating a potential downside of 5.09%. Given Select Comfort’s higher probable upside, analysts clearly believe Select Comfort is more favorable than Hooker Furniture.

Institutional & Insider Ownership

86.1% of Hooker Furniture shares are owned by institutional investors. 2.9% of Hooker Furniture shares are owned by insiders. Comparatively, 4.0% of Select Comfort shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Hooker Furniture and Select Comfort’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hooker Furniture 4.94% 15.28% 9.75%
Select Comfort 4.34% 51.12% 14.26%

Summary

Select Comfort beats Hooker Furniture on 10 of the 15 factors compared between the two stocks.

Hooker Furniture Company Profile

Hooker Furniture Corporation is a home furnishings marketing, design and logistics company offering sourcing of residential casegoods and upholstery, as well as domestically-produced leather and fabric-upholstered furniture. The Company operates through three segments: casegoods furniture, upholstered furniture and all other. The Company’s casegoods product categories include accents, home office, dining, bedroom and home entertainment furniture under the Hooker Furniture brand. Its residential upholstered seating companies include Bradington-Young, which is engaged in upscale motion and stationary leather furniture, and Sam Moore Furniture, which is engaged in upscale occasional chairs, settees, sofas and sectional seating with a focus on cover-to-frame customization. It also markets a line of imported leather upholstery under the Hooker Upholstery trade name. All other segment operates under the H Contract and Homeware brands.

Select Comfort Company Profile

Sleep Number Corporation, formerly Select Comfort Corporation, is a designer, manufacturer, marketer, retailer and servicer of a line of Sleep Number beds. The Company offers consumers individualized sleep solutions and services, which include a complete line of Sleep Number beds, bases and bedding accessories. Its Sleep Number bed offers SleepIQ technology sensors that work directly with the bed’s DualAir technology to track each individual’s sleep. The Sleep Number bedding collection comprises a line of sleep products that are designed to solve sleep issues. It offers FlextFit adjustable bases, and Sleep Number pillows, sheets and other bedding products. It offers Sleep Number beds in ranges within the mattress category, and in a range of sizes, including twin, full, queen, eastern king and California king. It also offers an assortment of temperature-balancing products.

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