Hooker Furniture Corporation (NASDAQ: HOFT) and Tempur Sealy International (NYSE:TPX) are both consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitabiliy, dividends, risk, valuation, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

83.3% of Hooker Furniture Corporation shares are held by institutional investors. 2.9% of Hooker Furniture Corporation shares are held by company insiders. Comparatively, 2.1% of Tempur Sealy International shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Hooker Furniture Corporation pays an annual dividend of $0.48 per share and has a dividend yield of 1.1%. Tempur Sealy International does not pay a dividend. Hooker Furniture Corporation pays out 20.2% of its earnings in the form of a dividend.

Profitability

This table compares Hooker Furniture Corporation and Tempur Sealy International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hooker Furniture Corporation 4.70% 14.53% 9.09%
Tempur Sealy International 6.69% 617.75% 8.15%

Volatility and Risk

Hooker Furniture Corporation has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500. Comparatively, Tempur Sealy International has a beta of 1.67, indicating that its stock price is 67% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Hooker Furniture Corporation and Tempur Sealy International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hooker Furniture Corporation 0 0 0 0 N/A
Tempur Sealy International 1 10 0 1 2.08

Tempur Sealy International has a consensus target price of $60.13, suggesting a potential upside of 2.99%. Given Tempur Sealy International’s higher possible upside, analysts clearly believe Tempur Sealy International is more favorable than Hooker Furniture Corporation.

Valuation and Earnings

This table compares Hooker Furniture Corporation and Tempur Sealy International’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Hooker Furniture Corporation $586.26 million 0.82 $48.13 million $2.38 17.58
Tempur Sealy International $2.98 billion 1.06 $434.00 million $3.51 16.63

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

Summary

Tempur Sealy International beats Hooker Furniture Corporation on 10 of the 15 factors compared between the two stocks.

Hooker Furniture Corporation 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.

Tempur Sealy International Company Profile

Tempur Sealy International, Inc. is a bedding manufacturer. The Company develops, manufactures, markets and distributes bedding products. The Company operates in two segments: North America and International. The North America segment consists of Tempur and Sealy manufacturing and distribution subsidiaries, joint ventures and licensees located in the United States and Canada. Its International segment consists of Tempur and Sealy manufacturing and distribution subsidiaries, joint ventures and licensees located in Europe, Asia-Pacific and Latin America. Its brand portfolio includes TEMPUR, Tempur-Pedic, Sealy, Sealy Posturepedic, and Stearns & Foster. It offers its products in over two categories, including Bedding, which includes mattresses, foundations and adjustable foundations, and Other, which includes pillows, mattress covers, sheets, cushions and various other comfort products. As of December 31, 2016, it sold its products across the globe in approximately 100 countries.

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