Interface (NASDAQ: TILE) and The Dixie Group (NASDAQ:DXYN) are both small-cap consumer discretionary companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, valuation, risk, institutional ownership, analyst recommendations, earnings and profitabiliy.

Profitability

This table compares Interface and The Dixie Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Interface 5.20% 19.18% 8.54%
The Dixie Group -0.27% -0.81% -0.25%

Analyst Ratings

This is a breakdown of recent ratings for Interface and The Dixie Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Interface 0 2 2 0 2.50
The Dixie Group 0 0 0 0 N/A

Interface currently has a consensus price target of $19.00, suggesting a potential downside of 2.81%. Given Interface’s higher possible upside, analysts clearly believe Interface is more favorable than The Dixie Group.

Institutional & Insider Ownership

93.6% of Interface shares are owned by institutional investors. Comparatively, 62.4% of The Dixie Group shares are owned by institutional investors. 1.9% of Interface shares are owned by company insiders. Comparatively, 15.1% of The Dixie Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

Interface pays an annual dividend of $0.24 per share and has a dividend yield of 1.2%. The Dixie Group does not pay a dividend. Interface pays out 31.2% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Interface and The Dixie Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Interface $957.17 million 1.28 $137.68 million $0.77 25.39
The Dixie Group $405.76 million 0.17 $16.17 million ($0.08) -56.24

Interface has higher revenue and earnings than The Dixie Group. The Dixie Group is trading at a lower price-to-earnings ratio than Interface, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Interface has a beta of 1.21, indicating that its share price is 21% more volatile than the S&P 500. Comparatively, The Dixie Group has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500.

Summary

Interface beats The Dixie Group on 12 of the 14 factors compared between the two stocks.

Interface Company Profile

Interface Inc. is engaged in design, production and sale of modular carpet, also known as carpet tile. As of January 1, 2017, the Company marketed its modular carpets in over 110 countries under the brand names Interface and FLOR. The Company operates through three segments: Americas, Europe and Asia-Pacific. The Company distributes its products through two primary channels, including direct sales to end users and indirect sales through independent contractors or distributors. The Company sells an antimicrobial chemical compound under the trademark Intersept that the Company incorporates in all of its modular carpet products. It also sells its TacTiles carpet tile installation system, along with a range of traditional adhesives and products for carpet installation and maintenance that are manufactured by a third party. It also provides turnkey project management services for national accounts and other customers through its InterfaceSERVICES business.

The Dixie Group Company Profile

The Dixie Group, Inc. is engaged in marketing, manufacturing and selling of carpet and rugs. The Company offers its products to various residential and commercial customers through its various sales forces and brands. The Company operates through the carpet and rug manufacturing segment. The Company also provides carpet and yarn related services to other manufacturers. The Company’s brands include Fabrica, Masland Residential, Dixie Home, Atlas Carpet Mills, Masland Contract and Masland Hospitality. Dixie International sells its brands outside of the North American market. Fabrica markets and manufactures various residential carpet and custom rugs. Masland Contract markets and manufactures broadloom and modular carpet tile for the specified commercial marketplace. Masland Residential markets and manufactures design-driven specialty carpets and rugs for the residential marketplace. Dixie Home markets a range of tufted broadloom residential and commercial carpets.

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