Stanley Furniture (NASDAQ: STLY) and Select Comfort (NASDAQ:SNBR) are both small-cap consumer discretionary companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, profitability, earnings, valuation, analyst recommendations, risk and institutional ownership.

Analyst Ratings

This is a summary of current recommendations and price targets for Stanley Furniture and Select Comfort, as reported by MarketBeat.

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

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

Profitability

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

Net Margins Return on Equity Return on Assets
Stanley Furniture -2.34% -10.31% -5.70%
Select Comfort 4.34% 51.12% 14.26%

Institutional and Insider Ownership

29.1% of Stanley Furniture shares are held by institutional investors. 28.6% of Stanley Furniture shares are held by company insiders. Comparatively, 4.0% of Select Comfort shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Stanley Furniture has a beta of 0.3, indicating that its share price is 70% less volatile than the S&P 500. Comparatively, Select Comfort has a beta of 0.59, indicating that its share price is 41% less volatile than the S&P 500.

Earnings and Valuation

This table compares Stanley Furniture and Select Comfort’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Stanley Furniture $44.57 million 0.29 -$5.25 million ($0.07) -12.14
Select Comfort $1.31 billion 1.07 $51.41 million $1.41 24.96

Select Comfort has higher revenue and earnings than Stanley Furniture. Stanley 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.

Summary

Select Comfort beats Stanley Furniture on 10 of the 12 factors compared between the two stocks.

Stanley Furniture Company Profile

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.

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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