Analyzing Hooker Furnishings (NASDAQ:HOFT) and Sekisui House (OTCMKTS:SKHSY)

Hooker Furnishings (NASDAQ:HOFT) and Sekisui House (OTCMKTS:SKHSY) are both consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their profitability, risk, institutional ownership, earnings, valuation, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Hooker Furnishings and Sekisui House, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hooker Furnishings	1	1	0	0	1.50
Sekisui House	0	0	0	1	4.00

Institutional & Insider Ownership

73.6% of Hooker Furnishings shares are owned by institutional investors. Comparatively, 0.0% of Sekisui House shares are owned by institutional investors. 2.7% of Hooker Furnishings shares are owned by 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.

Dividends

Hooker Furnishings pays an annual dividend of $0.46 per share and has a dividend yield of 3.6%. Sekisui House pays an annual dividend of $0.34 per share and has a dividend yield of 1.6%. Hooker Furnishings pays out -21.4% of its earnings in the form of a dividend. Sekisui House pays out 13.1% 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. Hooker Furnishings has increased its dividend for 9 consecutive years. Hooker Furnishings is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Hooker Furnishings has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500. Comparatively, Sekisui House has a beta of 0.37, suggesting that its share price is 63% less volatile than the S&P 500.

Profitability

This table compares Hooker Furnishings and Sekisui House’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hooker Furnishings	-7.90%	1.61%	1.17%
Sekisui House	6.09%	11.36%	4.85%

Valuation and Earnings

This table compares Hooker Furnishings and Sekisui House”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hooker Furnishings	$278.14 million	0.50	-$26.97 million	($2.15)	-6.00
Sekisui House	$28.07 billion	0.50	$1.56 billion	$2.60	8.24

Sekisui House has higher revenue and earnings than Hooker Furnishings. Hooker Furnishings is trading at a lower price-to-earnings ratio than Sekisui House, indicating that it is currently the more affordable of the two stocks.

Summary

Sekisui House beats Hooker Furnishings on 9 of the 16 factors compared between the two stocks.

About Hooker Furnishings

Hooker Furnishings Corporation designs, manufactures, imports, and markets residential household, hospitality, and contract furniture. It operates in three segments: Hooker Branded, Home Meridian, and Domestic Upholstery. The Hooker Branded segment offers design categories, including home entertainment, home office, accent, dining, and bedroom furniture under the Hooker Furniture brand; and imported upholstered furniture under the Hooker Upholstery brand. The Home Meridian segment provides home furnishings under the Accentrics Home brand; a range of bedroom, dining room, accent, display cabinet, home office, and youth furnishings under the Pulaski Furniture and Samuel Lawrence Furniture brands; and imported leather motion upholstery under the Prime Resources International brand. This segment also designs and supplies hotel furnishings for four and five-star hotels under the Samuel Lawrence Hospitality brand name. The Domestic Upholstery segment offers motion and stationary leather furniture under the Bradington-Young brand; chairs, sofas, sectionals, recliners, and a variety of accent upholstery pieces under the HF Custom brand; and upholstered furniture, such as private label sectionals, modulars, sofas, chairs, ottomans, benches, beds, and dining chairs for lifestyle specialty retailers under the Shenandoah Furniture brand. This segment also designs and manufactures outdoor furniture under the Sunset West brand. The company supplies upholstered seating and casegoods to upscale senior living and assisted living facilities through designers, design firms, industry dealers, and distributors under the H Contract brand; and interior designer products under the Lifestyle Brands name; and lighting, accessories, and home décor products under the BOBO Intriguing Objects brand. It sells home furnishing products through retailers, such as independent furniture stores, department stores, mass merchants, national chains, catalog merchants, interior designers, and e-commerce retailers primarily in North America. Hooker Furnishings Corporation was incorporated in 1924 and is headquartered in Martinsville, Virginia.

About Sekisui House

Sekisui House, Ltd. designs, constructs, and contracts built-to-order detached houses in Japan and internationally. The company operates through Custom Detached Houses, Rental Housing, Architectural/Civil Engineering, Remodeling, Real Estate Management Fees, Houses For Sale, Condominiums, Urban Redevelopment, and Overseas segments. It also engages in contracting of design and construction of custom detached houses, rental housing, office building, commercial buildings, and other properties; construction of reinforced concrete rental housing and commercial buildings; contracting of design and construction of civil engineering works; remodeling and renovation of houses; subleasing, management, operation, and brokerage of real estate; sale of houses and residential land; and sales of condominiums. Sekisui House, Ltd. was incorporated in 1929 and is headquartered in Osaka, Japan.