Contrasting Sleep Number (NASDAQ:SNBR) & Green Brick Partners (NASDAQ:GRBK)

Green Brick Partners (NASDAQ:GRBK) and Sleep Number (NASDAQ:SNBR) are both consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, earnings, dividends and risk.

Institutional & Insider Ownership

78.2% of Green Brick Partners shares are owned by institutional investors. Comparatively, 85.7% of Sleep Number shares are owned by institutional investors. 30.3% of Green Brick Partners shares are owned by company insiders. Comparatively, 3.6% of Sleep Number shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for Green Brick Partners and Sleep Number, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Green Brick Partners	0	3	0	0	2.00
Sleep Number	2	2	0	0	1.50

Sleep Number has a consensus price target of $3.50, indicating a potential upside of 2,700.00%. Given Sleep Number’s higher probable upside, analysts plainly believe Sleep Number is more favorable than Green Brick Partners.

Earnings and Valuation

This table compares Green Brick Partners and Sleep Number”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Green Brick Partners	$1.98 billion	1.34	$284.63 million	$6.22	10.05
Sleep Number	$1.34 billion	0.00	-$131.96 million	($7.56)	-0.02

Green Brick Partners has higher revenue and earnings than Sleep Number. Sleep Number is trading at a lower price-to-earnings ratio than Green Brick Partners, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Green Brick Partners and Sleep Number’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Green Brick Partners	17.70%	25.35%	17.29%
Sleep Number	-12.98%	N/A	-16.48%

Risk and Volatility

Green Brick Partners has a beta of 1.76, meaning that its stock price is 76% more volatile than the S&P 500. Comparatively, Sleep Number has a beta of 2.49, meaning that its stock price is 149% more volatile than the S&P 500.

Summary

Green Brick Partners beats Sleep Number on 10 of the 13 factors compared between the two stocks.

About Green Brick Partners

Green Brick Partners, Inc. is a diversified homebuilding and land development company in the United States. The company operates through three segments: Builder operations Central, Builder operations Southeast, and Land Development. The Builder operations Central segment operates builders in Texas; and the closing and delivery of homes. The Builder operations Southeast operates builders in Georgia and Florida. The Land Development segment acquires land for the development of residential lots that are transferred to our controlled builders or sold to third party homebuilders. It also provides financial services platform, including mortgage and title services. In addition, the company is engaged in all aspects of the homebuilding process, including land acquisition and development, entitlements, design, construction, marketing, and sales for its residential neighborhoods and master-planned communities. Green Brick Partners, Inc. was incorporated in 2006 and is based in Plano, Texas.

About Sleep Number

Sleep Number Corporation, together with its subsidiaries, offers sleep solutions and services in the United States. The company designs, manufactures, markets, retails, and services beds, pillows, sheets, and other bedding products under the Sleep Number name. It also provides smart adjustable bases under the FlextFit brand, and smart beds under the Climate 360 name. The company sells its products directly to consumers through retail, online, phone, chat, and other. The company was formerly known as Select Comfort Corporation and changed its name to Sleep Number Corporation in November 2017. Sleep Number Corporation was incorporated in 1987 and is headquartered in Minneapolis, Minnesota.