La-Z-Boy (NYSE:LZB – Get Free Report) and Hovnanian Enterprises (NYSE:HOV – Get Free Report) are both small-cap consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, earnings, valuation, profitability, dividends, institutional ownership and analyst recommendations.
Profitability
This table compares La-Z-Boy and Hovnanian Enterprises’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| La-Z-Boy | 3.86% | 11.79% | 6.12% |
| Hovnanian Enterprises | 0.64% | 8.64% | 2.17% |
Analyst Recommendations
This is a summary of recent ratings and price targets for La-Z-Boy and Hovnanian Enterprises, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| La-Z-Boy | 1 | 1 | 3 | 0 | 2.40 |
| Hovnanian Enterprises | 2 | 2 | 0 | 0 | 1.50 |
Valuation & Earnings
This table compares La-Z-Boy and Hovnanian Enterprises”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| La-Z-Boy | $2.13 billion | 0.62 | $101.99 million | $1.97 | 16.61 |
| Hovnanian Enterprises | $2.98 billion | 0.25 | $63.87 million | $0.95 | 129.37 |
La-Z-Boy has higher earnings, but lower revenue than Hovnanian Enterprises. La-Z-Boy is trading at a lower price-to-earnings ratio than Hovnanian Enterprises, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
La-Z-Boy has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500. Comparatively, Hovnanian Enterprises has a beta of 1.83, suggesting that its share price is 83% more volatile than the S&P 500.
Institutional and Insider Ownership
99.6% of La-Z-Boy shares are owned by institutional investors. Comparatively, 65.4% of Hovnanian Enterprises shares are owned by institutional investors. 3.1% of La-Z-Boy shares are owned by company insiders. Comparatively, 22.7% of Hovnanian Enterprises shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Summary
La-Z-Boy beats Hovnanian Enterprises on 10 of the 14 factors compared between the two stocks.
About La-Z-Boy
La-Z-Boy Incorporated manufactures, markets, imports, exports, distributes, and retails upholstery furniture products, accessories, and casegoods furniture products in the United States, Canada, and internationally. It operates through Wholesale, Retail, Corporate and Other segments. The Wholesale segment manufactures, and imports upholstered furniture, such as recliners and motion furniture, sofas, loveseats, chairs, sectionals, modulars, ottomans, and sleeper sofas; and imports, distributes, and retails casegoods (wood) furniture, including occasional pieces, bedroom sets, dining room sets, entertainment centers, and occasional pieces. This segment sells its products directly to La-Z-Boy Furniture Galleries stores, operators of La-Z-Boy Comfort Studio locations, England Custom Comfort Center locations, dealers, and other independent retailers. The Retail segment sells upholstered furniture, casegoods, and other accessories to the end consumer through its retail network. The company also produces reclining chairs; and manufactures and distributes residential furniture. Its Corporate and Other segment sells the products through its website. The company was formerly known as La-Z-Boy Chair Company and changed its name to La-Z-Boy Incorporated in 1996. La-Z-Boy Incorporated was founded in 1927 and is headquartered in Monroe, Michigan.
About Hovnanian Enterprises
Hovnanian Enterprises, Inc., through its subsidiaries, designs, constructs, markets, and sells residential homes in the United States. It offers single-family detached homes, attached townhomes and condominiums, urban infill, and active lifestyle homes with amenities, such as clubhouses, swimming pools, tennis courts, tot lots, and open areas. The company markets and builds homes for first-time buyers, first-time and second-time move-up buyers, luxury buyers, active lifestyle buyers, and empty nesters. It also provides mortgage loans, title insurance, and homeowner’s insurance services. The company was founded in 1959 and is headquartered in Matawan, New Jersey.
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