Dixie Group (NASDAQ: DXYN) and Virco Mfg. (NASDAQ:VIRC) are both small-cap consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.

Profitability

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This table compares Dixie Group and Virco Mfg.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dixie Group -2.32% -1.35% -0.40%
Virco Mfg. 0.19% 0.58% 0.27%

Risk & Volatility

Dixie Group has a beta of 0.37, meaning that its share price is 63% less volatile than the S&P 500. Comparatively, Virco Mfg. has a beta of -0.07, meaning that its share price is 107% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Dixie Group and Virco Mfg., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dixie Group 0 0 0 0 N/A
Virco Mfg. 0 0 0 0 N/A

Virco Mfg. has a consensus target price of $6.00, indicating a potential upside of 37.93%. Given Virco Mfg.’s higher probable upside, analysts plainly believe Virco Mfg. is more favorable than Dixie Group.

Dividends

Virco Mfg. pays an annual dividend of $0.06 per share and has a dividend yield of 1.4%. Dixie Group does not pay a dividend. Virco Mfg. pays out 600.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider and Institutional Ownership

64.1% of Dixie Group shares are owned by institutional investors. Comparatively, 30.2% of Virco Mfg. shares are owned by institutional investors. 16.0% of Dixie Group shares are owned by insiders. Comparatively, 12.2% of Virco Mfg. shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Dixie Group and Virco Mfg.’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Dixie Group $412.46 million 0.11 -$9.55 million ($0.60) -4.67
Virco Mfg. $173.42 million 0.39 $22.76 million $0.01 435.44

Virco Mfg. has lower revenue, but higher earnings than Dixie Group. Dixie Group is trading at a lower price-to-earnings ratio than Virco Mfg., indicating that it is currently the more affordable of the two stocks.

Summary

Virco Mfg. beats Dixie Group on 9 of the 14 factors compared between the two stocks.

About Dixie Group

The Dixie Group, Inc. is engaged in marketing, manufacturing and selling of carpet and rugs. The Company offers its products to various residential and commercial customers through its various sales forces and brands. The Company operates through the carpet and rug manufacturing segment. The Company also provides carpet and yarn related services to other manufacturers. The Company’s brands include Fabrica, Masland Residential, Dixie Home, Atlas Carpet Mills, Masland Contract and Masland Hospitality. Dixie International sells its brands outside of the North American market. Fabrica markets and manufactures various residential carpet and custom rugs. Masland Contract markets and manufactures broadloom and modular carpet tile for the specified commercial marketplace. Masland Residential markets and manufactures design-driven specialty carpets and rugs for the residential marketplace. Dixie Home markets a range of tufted broadloom residential and commercial carpets.

About Virco Mfg.

Virco Mfg. Corporation (Virco) is engaged in the designing, producing and distributing of furniture for a range family of customers. The Company is a manufacturer and supplier of moveable educational furniture and equipment for the preschool through 12th grade market in the United States. It manufactures an assortment of products, including mobile tables, mobile storage equipment, desks, computer furniture, chairs, folding chairs and folding tables. Its primary furniture lines are constructed of tubular metal legs and frames, combined with wood and plastic tops, plastic seats and backs, upholstered seats and backs, and upholstered rigid polyethylene and polypropylene shells. Virco also has flat metal forming capabilities to enable the production of desks, returns, bookcases, filing cabinets, mobile pedestals and related items. Its ZUMA line includes cantilever chairs; tablet arm chairs with a fixed or articulating work surface and a compact footprint, and steel-frame rockers.

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