Stanley Furniture (NASDAQ: STLY) and Tempur Sealy International (NYSE:TPX) are both consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, profitability and institutional ownership.

Profitability

This table compares Stanley Furniture and Tempur Sealy International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Stanley Furniture -6.38% -18.33% -10.44%
Tempur Sealy International 6.69% 617.75% 8.15%

Insider and Institutional Ownership

30.0% of Stanley Furniture shares are held by institutional investors. 28.6% of Stanley Furniture shares are held by company insiders. Comparatively, 2.1% of Tempur Sealy International shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Stanley Furniture has a beta of 0.36, indicating that its stock price is 64% less volatile than the S&P 500. Comparatively, Tempur Sealy International has a beta of 1.67, indicating that its stock price is 67% more volatile than the S&P 500.

Earnings and Valuation

This table compares Stanley Furniture and Tempur Sealy International’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Stanley Furniture $43.64 million 0.39 -$3.31 million ($0.20) -5.70
Tempur Sealy International $2.98 billion 1.12 $445.50 million $3.51 17.65

Tempur Sealy International has higher revenue and earnings than Stanley Furniture. Stanley Furniture is trading at a lower price-to-earnings ratio than Tempur Sealy International, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations for Stanley Furniture and Tempur Sealy International, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stanley Furniture 0 0 0 0 N/A
Tempur Sealy International 1 9 1 1 2.17

Tempur Sealy International has a consensus price target of $62.50, indicating a potential upside of 0.87%. Given Tempur Sealy International’s higher possible upside, analysts plainly believe Tempur Sealy International is more favorable than Stanley Furniture.

Summary

Tempur Sealy International beats Stanley Furniture on 11 of the 13 factors compared between the two stocks.

About Stanley Furniture

Stanley Furniture Company, Inc. is a design, marketing and sourcing resource in the wood residential furniture market. The Company’s segment is sale of residential wood furniture products. The Company markets its brands through a network of brick-and-mortar furniture retailers, online retailers and interior designers around the world. The Company’s products are marketed under the Stanley Furniture brand, but also under sub-brands, including Coastal Living and Stone & Leigh. The Company’s products are marketed as wood residential home furnishings and include a range of offerings for the home, including dining, bedroom, living room, home office, home entertainment, accent items, and nursery and youth furniture. The Company provides products in a range of wood species and finishes. The Company’s product is sourced from independently owned factories in Southeast Asia, primarily in Vietnam.

About Tempur Sealy International

Tempur Sealy International, Inc. is a bedding manufacturer. The Company develops, manufactures, markets and distributes bedding products. The Company operates in two segments: North America and International. The North America segment consists of Tempur and Sealy manufacturing and distribution subsidiaries, joint ventures and licensees located in the United States and Canada. Its International segment consists of Tempur and Sealy manufacturing and distribution subsidiaries, joint ventures and licensees located in Europe, Asia-Pacific and Latin America. Its brand portfolio includes TEMPUR, Tempur-Pedic, Sealy, Sealy Posturepedic, and Stearns & Foster. It offers its products in over two categories, including Bedding, which includes mattresses, foundations and adjustable foundations, and Other, which includes pillows, mattress covers, sheets, cushions and various other comfort products. As of December 31, 2016, it sold its products across the globe in approximately 100 countries.

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