Critical Contrast: Crown Crafts (NASDAQ:CRWS) and Cricut (NASDAQ:CRCT)

Crown Crafts (NASDAQ:CRWS) and Cricut (NASDAQ:CRCT) are both small-cap consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Valuation and Earnings

This table compares Crown Crafts and Cricut”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Crown Crafts	$82.27 million	0.32	$1.84 million	$0.47	5.26
Cricut	$708.78 million	2.62	$76.71 million	$0.46	19.30

Cricut has higher revenue and earnings than Crown Crafts. Crown Crafts is trading at a lower price-to-earnings ratio than Cricut, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Crown Crafts and Cricut, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Crown Crafts	0	1	0	0	2.00
Cricut	4	2	0	0	1.33

Cricut has a consensus price target of $4.73, suggesting a potential downside of 46.70%. Given Cricut’s higher probable upside, analysts plainly believe Cricut is more favorable than Crown Crafts.

Institutional and Insider Ownership

30.2% of Crown Crafts shares are owned by institutional investors. Comparatively, 19.6% of Cricut shares are owned by institutional investors. 12.3% of Crown Crafts shares are owned by company insiders. Comparatively, 16.5% of Cricut shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Crown Crafts has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500. Comparatively, Cricut has a beta of 0.24, suggesting that its stock price is 76% less volatile than the S&P 500.

Profitability

This table compares Crown Crafts and Cricut’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Crown Crafts	5.99%	12.79%	6.84%
Cricut	13.42%	25.88%	16.10%

Dividends

Crown Crafts pays an annual dividend of $0.12 per share and has a dividend yield of 4.9%. Cricut pays an annual dividend of $0.20 per share and has a dividend yield of 2.3%. Crown Crafts pays out 25.5% of its earnings in the form of a dividend. Cricut pays out 43.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Crown Crafts is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Cricut beats Crown Crafts on 9 of the 15 factors compared between the two stocks.

About Crown Crafts

Crown Crafts, Inc. is a consumer products company that designs, markets and distributes products for infants, toddlers and young children. Its offerings include feeding and care products, bibs, bath accessories, developmental toys, activity products, nursery bedding, blankets and other nursery accessories. The company sells products through mass-market retailers, specialty stores and e-commerce channels. Crown Crafts markets products under proprietary brands such as Neat Solutions and Sassy, as well as through licensed brands and designs.

About Cricut

Cricut, Inc. provides a platform of products and services for people who create personalized projects. Its offerings include connected cutting machines, heat presses, tools and materials used to make items such as cards, home décor, apparel and gifts. The company also offers Design Space, a digital design application that lets users create or customize projects and send them to compatible Cricut machines. Optional subscription services provide access to additional designs and other creative content.