La-Z-Boy (NYSE: LZB) and Hooker Furniture Corporation (NASDAQ:HOFT) 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 profitabiliy, earnings, valuation, institutional ownership, analyst recommendations, dividends and risk.

Earnings and Valuation

This table compares La-Z-Boy and Hooker Furniture Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
La-Z-Boy $1.52 billion 0.87 $151.16 million $1.62 16.70
Hooker Furniture Corporation $586.26 million 0.78 $48.13 million $2.38 16.58

La-Z-Boy has higher revenue and earnings than Hooker Furniture Corporation. Hooker Furniture Corporation is trading at a lower price-to-earnings ratio than La-Z-Boy, indicating that it is currently the more affordable of the two stocks.

Dividends

La-Z-Boy pays an annual dividend of $0.44 per share and has a dividend yield of 1.6%. Hooker Furniture Corporation pays an annual dividend of $0.48 per share and has a dividend yield of 1.2%. La-Z-Boy pays out 27.2% of its earnings in the form of a dividend. Hooker Furniture Corporation pays out 20.2% 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.

Profitability

This table compares La-Z-Boy and Hooker Furniture Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
La-Z-Boy 5.29% 14.80% 10.25%
Hooker Furniture Corporation 4.70% 14.53% 9.09%

Volatility & Risk

La-Z-Boy has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500. Comparatively, Hooker Furniture Corporation has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500.

Institutional and Insider Ownership

85.8% of La-Z-Boy shares are held by institutional investors. Comparatively, 84.1% of Hooker Furniture Corporation shares are held by institutional investors. 3.6% of La-Z-Boy shares are held by insiders. Comparatively, 2.9% of Hooker Furniture Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings for La-Z-Boy and Hooker Furniture Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
La-Z-Boy 0 3 1 0 2.25
Hooker Furniture Corporation 0 0 1 0 3.00

La-Z-Boy presently has a consensus price target of $29.00, suggesting a potential upside of 7.21%. Given La-Z-Boy’s higher probable upside, equities analysts plainly believe La-Z-Boy is more favorable than Hooker Furniture Corporation.

Summary

La-Z-Boy beats Hooker Furniture Corporation on 11 of the 15 factors compared between the two stocks.

About La-Z-Boy

La-Z-Boy Incorporated manufactures, markets, imports, exports, distributes and retails upholstery furniture products. The Company also imports, distributes and retails accessories and casegoods (wood) furniture products. The Company’s segments include the Upholstery segment, the Casegoods segment and the Retail segment. The Company is the producer of reclining chairs and manufacturer/distributor of residential furniture in the United States. The Company sells its products, primarily in the United States and Canada, as well as internationally, to furniture retailers and directly to consumers through stores that it owns and operates. The Company has a network of approximately 340 La-Z-Boy Furniture Galleries stores and over 560 Comfort Studio locations. The Company owns approximately 120 of the La-Z-Boy Furniture Galleries stores. The Company’s other brands include England, Kincaid, American Drew and Hammary.

About Hooker Furniture Corporation

Hooker Furniture Corporation is a home furnishings marketing, design and logistics company offering sourcing of residential casegoods and upholstery, as well as domestically-produced leather and fabric-upholstered furniture. The Company operates through three segments: casegoods furniture, upholstered furniture and all other. The Company’s casegoods product categories include accents, home office, dining, bedroom and home entertainment furniture under the Hooker Furniture brand. Its residential upholstered seating companies include Bradington-Young, which is engaged in upscale motion and stationary leather furniture, and Sam Moore Furniture, which is engaged in upscale occasional chairs, settees, sofas and sectional seating with a focus on cover-to-frame customization. It also markets a line of imported leather upholstery under the Hooker Upholstery trade name. All other segment operates under the H Contract and Homeware brands.

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