Reviewing Flexsteel Industries (NASDAQ:FLXS) & Garmin (NYSE:GRMN)

Garmin (NYSE:GRMN) and Flexsteel Industries (NASDAQ:FLXS) are both consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, valuation, institutional ownership, analyst recommendations, earnings and risk.

Analyst Ratings

This is a summary of recent ratings for Garmin and Flexsteel Industries, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Garmin	1	5	3	1	2.40
Flexsteel Industries	0	2	1	1	2.75

Garmin currently has a consensus price target of $315.29, indicating a potential upside of 16.15%. Flexsteel Industries has a consensus price target of $86.00, indicating a potential upside of 17.61%. Given Flexsteel Industries’ stronger consensus rating and higher possible upside, analysts clearly believe Flexsteel Industries is more favorable than Garmin.

Profitability

This table compares Garmin and Flexsteel Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Garmin	25.58%	21.94%	17.81%
Flexsteel Industries	6.75%	15.92%	9.31%

Insider & Institutional Ownership

81.6% of Garmin shares are owned by institutional investors. Comparatively, 36.3% of Flexsteel Industries shares are owned by institutional investors. 14.8% of Garmin shares are owned by insiders. Comparatively, 13.1% of Flexsteel Industries shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Garmin and Flexsteel Industries”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Garmin	$7.25 billion	7.22	$1.66 billion	$10.42	26.05
Flexsteel Industries	$459.18 million	0.66	$33.13 million	$6.14	11.91

Garmin has higher revenue and earnings than Flexsteel Industries. Flexsteel Industries is trading at a lower price-to-earnings ratio than Garmin, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Garmin has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500. Comparatively, Flexsteel Industries has a beta of 0.61, indicating that its share price is 39% less volatile than the S&P 500.

Dividends

Garmin pays an annual dividend of $4.20 per share and has a dividend yield of 1.5%. Flexsteel Industries pays an annual dividend of $1.00 per share and has a dividend yield of 1.4%. Garmin pays out 40.3% of its earnings in the form of a dividend. Flexsteel Industries pays out 16.3% 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. Garmin has raised its dividend for 8 consecutive years and Flexsteel Industries has raised its dividend for 1 consecutive years. Garmin is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Garmin beats Flexsteel Industries on 14 of the 17 factors compared between the two stocks.

About Garmin

Garmin Ltd. designs, develops, manufactures, markets, and distributes a range of wireless devices worldwide. Its Fitness segment offers running and multi-sport watches; cycling products; smartwatch devices; scales and monitors; and fitness accessories. This segment also provides Garmin Connect and Garmin Connect Mobile, which are web and mobile platforms where users can track and analyze their fitness, activities and workouts, and wellness data; and Connect IQ, an application development platform. The company's Outdoor segment offers adventure watches, outdoor handhelds and satellite communicators, golf devices, consumer automotive devices, and dog devices, as well as InReach and Gramin response communication device. Its Aviation segment designs, manufactures, and markets various aircraft avionics solutions, including integrated flight decks, electronic flight displays and instrumentation, navigation and communication products, automatic flight control systems and safety-enhancing technologies, audio control systems, engine indication systems, traffic awareness and avoidance solutions, ADS-B and transponders, weather information and avoidance solutions, datalink and connectivity solutions, and various services. The company's Marine segment provides chartplotters and multi-function displays, cartography products, fishfinders, sonar products, autopilot systems, radars, compliant instrument displays and sensors, VHF communication radios, handhelds and wearable devices, sailing products, audio products and accessories, digital switching products, and trolling motors. Its Auto segment offers embedded domain controllers and infotainment units; and software, map database, cameras, wearables, and automotive solutions. The company sells its products through independent retailers, dealers, distributors, installation and repair shops, and original equipment manufacturers, as well as online webshop. Garmin Ltd. was founded in 1989 and is based in Schaffhausen, Switzerland.

About Flexsteel Industries

Flexsteel Industries, Inc., together with its subsidiaries, operates as a manufacturer, importer, and markets of upholstered furniture for residential and contract markets in the United States. It provides upholstered furniture, such as sofas, loveseats, chairs, reclining rocking chairs, swivel rockers, sofa beds, convertible bedding units, occasional tables, desks, dining tables and chairs, kitchen storage, bedroom furniture, and outdoor furniture. The company distributes its products through e-commerce channels and dealer sales force. It also engages in export related activities. Flexsteel Industries, Inc. was founded in 1893 and is based in Dubuque, Iowa.