Comparing Smith Douglas Homes (NYSE:SDHC) and Ethan Allen Interiors (NYSE:ETD)

Ethan Allen Interiors (NYSE:ETD) and Smith Douglas Homes (NYSE:SDHC) are both small-cap consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.

Institutional & Insider Ownership

83.8% of Ethan Allen Interiors shares are held by institutional investors. 9.9% of Ethan Allen Interiors shares are held by insiders. Comparatively, 84.2% of Smith Douglas Homes shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Ethan Allen Interiors and Smith Douglas Homes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ethan Allen Interiors	6.88%	7.88%	5.17%
Smith Douglas Homes	0.64%	-0.19%	-0.14%

Analyst Ratings

This is a summary of current ratings and recommmendations for Ethan Allen Interiors and Smith Douglas Homes, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ethan Allen Interiors	1	2	0	0	1.67
Smith Douglas Homes	2	7	1	0	1.90

Ethan Allen Interiors presently has a consensus target price of $22.00, suggesting a potential downside of 0.27%. Smith Douglas Homes has a consensus target price of $13.90, suggesting a potential upside of 34.30%. Given Smith Douglas Homes’ stronger consensus rating and higher probable upside, analysts plainly believe Smith Douglas Homes is more favorable than Ethan Allen Interiors.

Valuation & Earnings

This table compares Ethan Allen Interiors and Smith Douglas Homes”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ethan Allen Interiors	$579.49 million	0.96	$39.88 million	$1.56	14.14
Smith Douglas Homes	$971.12 million	0.54	$10.69 million	$0.72	14.38

Ethan Allen Interiors has higher earnings, but lower revenue than Smith Douglas Homes. Ethan Allen Interiors is trading at a lower price-to-earnings ratio than Smith Douglas Homes, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Ethan Allen Interiors has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500. Comparatively, Smith Douglas Homes has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500.

Summary

Ethan Allen Interiors beats Smith Douglas Homes on 8 of the 14 factors compared between the two stocks.

About Ethan Allen Interiors

Ethan Allen Interiors Inc. operates as an interior design company, and manufacturer and retailer of home furnishings in the United States, Mexico, Honduras, and Canada. The company operates in two segments, Wholesale and Retail. Its products include case goods items, such as beds, dressers, armoires, tables, chairs, buffets, entertainment units, home office furniture, and wooden accents; upholstery comprising fabric-covered items, such as sleepers, recliners and other motion furniture, chairs, ottomans, custom pillows, sofas, loveseats, cut fabrics, and leather; and home accent items consisting of window treatments and drapery hardware, wall decors, florals, lighting, clocks, mattresses, bedspreads, throws, pillows, decorative accents, area rugs, wall coverings, and home and garden furnishings. The company markets and sells its products under the Ethan Allen brand through home furnishing retail networks and independent retailers, as well as through ethanallen.com website. It operates a network of design centers. Ethan Allen Interiors Inc. was founded in 1932 and is headquartered in Danbury, Connecticut.

About Smith Douglas Homes

Smith Douglas Homes Corp., together with its subsidiaries, engages in the design, construction, and sale of single-family homes in the southeastern United States. It also provides closing, escrow, and title insurance services. The company sells its products to entry-level and empty-nest homebuyers. Smith Douglas Homes Corp. was founded in 2008 and is headquartered in Woodstock, Georgia.