Restoration Hardware Holdings (NYSE: RH) and Haverty Furniture Companies (NYSE:HVT) are both retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their profitabiliy, risk, dividends, institutional ownership, earnings, valuation and analyst recommendations.

Profitability

This table compares Restoration Hardware Holdings and Haverty Furniture Companies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Restoration Hardware Holdings 0.66% 6.42% 2.55%
Haverty Furniture Companies 3.59% 10.32% 6.47%

Analyst Ratings

This is a breakdown of current ratings for Restoration Hardware Holdings and Haverty Furniture Companies, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Restoration Hardware Holdings 0 11 7 0 2.39
Haverty Furniture Companies 0 2 0 0 2.00

Restoration Hardware Holdings currently has a consensus target price of $50.93, indicating a potential downside of 22.84%. Haverty Furniture Companies has a consensus target price of $23.00, indicating a potential upside of 3.14%. Given Haverty Furniture Companies’ higher probable upside, analysts plainly believe Haverty Furniture Companies is more favorable than Restoration Hardware Holdings.

Earnings and Valuation

This table compares Restoration Hardware Holdings and Haverty Furniture Companies’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Restoration Hardware Holdings $2.24 billion 0.98 $170.90 million $0.35 188.58
Haverty Furniture Companies $827.70 million 0.52 $74.92 million $1.37 16.28

Restoration Hardware Holdings has higher revenue and earnings than Haverty Furniture Companies. Haverty Furniture Companies is trading at a lower price-to-earnings ratio than Restoration Hardware Holdings, indicating that it is currently the more affordable of the two stocks.

Dividends

Haverty Furniture Companies pays an annual dividend of $0.48 per share and has a dividend yield of 2.2%. Restoration Hardware Holdings does not pay a dividend. Haverty Furniture Companies pays out 35.0% of its earnings in the form of a dividend.

Volatility & Risk

Restoration Hardware Holdings has a beta of 1.48, indicating that its stock price is 48% more volatile than the S&P 500. Comparatively, Haverty Furniture Companies has a beta of 1.13, indicating that its stock price is 13% more volatile than the S&P 500.

Insider and Institutional Ownership

79.1% of Haverty Furniture Companies shares are held by institutional investors. 18.8% of Restoration Hardware Holdings shares are held by company insiders. Comparatively, 10.3% of Haverty Furniture Companies shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Restoration Hardware Holdings beats Haverty Furniture Companies on 9 of the 16 factors compared between the two stocks.

About Restoration Hardware Holdings

RH, formerly Restoration Hardware Holdings, Inc., is a retailer in the home furnishings marketplace. As of January 28, 2017, the Company had two segments: RH Segment and Waterworks. It offers merchandise assortments across a range of categories, including furniture, lighting, textiles, bathware, decor, outdoor and garden, tableware, and child and teen furnishings. The Company classifies its sales into furniture and non-furniture product lines. The Furniture category includes both indoor and outdoor furniture. The Non-furniture category includes lighting, textiles, fittings, fixtures, surfaces, accessories and home decor. The Company’s business is integrated across its channels of distribution consisting of its stores, Source Books and Websites. The Company also owns a controlling interest in Design Investors WW Acquisition Company, LLC, which owns the business operating under the name ‘Waterworks’.

About Haverty Furniture Companies

Haverty Furniture Companies, Inc. is a retailer of residential furniture and accessories. The Company sells home furnishings in its retail stores and through its Website, havertys.com. As of December 31, 2016, the Company had 124 stores in 16 states in the Southern and Midwest regions. As of December 31, 2016, the Company’s retail store space totaled approximately 4.5 million square feet for 124 stores. It also offers financing through a third-party finance company, as well as an internal revolving charge credit plan. The Company’s retail locations are operated using the Havertys name. It offers mattress product lines, such as Sealy, Tempur-Pedic, Serta, Stearns & Foster and Beautyrest Black. The Company’s customers are college educated women in middle to upper-middle income households. The Company stores are located in areas, including Florida, Texas, North Carolina, Tennessee and Maryland.

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