La-Z-Boy (NYSE: LZB) and Bassett Furniture Industries, (NASDAQ:BSET) are both small-cap consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, earnings, valuation, profitabiliy, analyst recommendations and dividends.

Analyst Ratings

This is a summary of recent ratings and target prices for La-Z-Boy and Bassett Furniture Industries,, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
La-Z-Boy 0 3 1 0 2.25
Bassett Furniture Industries, 0 1 0 0 2.00

La-Z-Boy presently has a consensus price target of $29.00, indicating a potential downside of 9.09%. Bassett Furniture Industries, has a consensus price target of $36.00, indicating a potential downside of 6.01%. Given Bassett Furniture Industries,’s higher possible upside, analysts plainly believe Bassett Furniture Industries, is more favorable than La-Z-Boy.

Profitability

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

Net Margins Return on Equity Return on Assets
La-Z-Boy 5.65% 14.82% 10.19%
Bassett Furniture Industries, 4.08% 9.05% 6.02%

Valuation and Earnings

This table compares La-Z-Boy and Bassett Furniture Industries,’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
La-Z-Boy $1.52 billion 1.01 $159.71 million $1.74 18.33
Bassett Furniture Industries, $438.52 million 0.94 $42.16 million $1.66 23.07

La-Z-Boy has higher revenue and earnings than Bassett Furniture Industries,. La-Z-Boy is trading at a lower price-to-earnings ratio than Bassett Furniture Industries,, 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 1.4%. Bassett Furniture Industries, pays an annual dividend of $0.40 per share and has a dividend yield of 1.0%. La-Z-Boy pays out 25.3% of its earnings in the form of a dividend. Bassett Furniture Industries, pays out 24.1% 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.

Insider and Institutional Ownership

85.8% of La-Z-Boy shares are owned by institutional investors. Comparatively, 71.4% of Bassett Furniture Industries, shares are owned by institutional investors. 3.6% of La-Z-Boy shares are owned by insiders. Comparatively, 6.4% of Bassett Furniture Industries, shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

La-Z-Boy has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500. Comparatively, Bassett Furniture Industries, has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500.

Summary

La-Z-Boy beats Bassett Furniture Industries, on 11 of the 16 factors compared between the two stocks.

La-Z-Boy Company Profile

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.

Bassett Furniture Industries, Company Profile

Bassett Furniture Industries, Incorporated is a manufacturer, importer and retailer of home furnishings. The Company’s segments include Wholesale, Retail – Company-owned stores and Logistical services. Its wholesale home furnishings segment is involved in the design, manufacture, sourcing, sale and distribution of furniture products to a network of Bassett stores (licensee-owned stores and Company-owned stores) and independent furniture retailers. Its retail segment consists of Company-owned stores. It operates its logistical services segment through its subsidiary, Zenith Freight Lines, LLC, which provides shipping, delivery and warehousing services. Its portfolio of products includes Canopy Bed, Nightstands, Baby Bedding, Bedside Tables, Chaise Lounge, Writing Desks, Kitchen Furniture, Computer Hutch, Game Tables and Fabric Ottomans. Its range of furniture products and accessories are sold through a nation-wide network of over 90 retail stores known as Bassett Home Furnishings.

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