Ethan Allen Interiors (NYSE: ETH) and La-Z-Boy (NYSE:LZB) are both small-cap retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, profitabiliy, institutional ownership, earnings, risk and analyst recommendations.
This is a summary of recent recommendations and price targets for Ethan Allen Interiors and La-Z-Boy, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Ethan Allen Interiors||0||5||1||1||2.43|
Ethan Allen Interiors currently has a consensus target price of $35.00, suggesting a potential upside of 17.85%. La-Z-Boy has a consensus target price of $29.00, suggesting a potential upside of 7.21%. Given Ethan Allen Interiors’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Ethan Allen Interiors is more favorable than La-Z-Boy.
Volatility and Risk
Ethan Allen Interiors has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500. Comparatively, La-Z-Boy has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500.
Institutional and Insider Ownership
99.2% of Ethan Allen Interiors shares are owned by institutional investors. Comparatively, 85.8% of La-Z-Boy shares are owned by institutional investors. 11.0% of Ethan Allen Interiors shares are owned by company insiders. Comparatively, 3.6% of La-Z-Boy shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Valuation and Earnings
This table compares Ethan Allen Interiors and La-Z-Boy’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Ethan Allen Interiors||$774.15 million||1.06||$84.86 million||$1.47||20.20|
|La-Z-Boy||$1.52 billion||0.87||$151.16 million||$1.62||16.70|
La-Z-Boy has higher revenue and earnings than Ethan Allen Interiors. La-Z-Boy is trading at a lower price-to-earnings ratio than Ethan Allen Interiors, indicating that it is currently the more affordable of the two stocks.
This table compares Ethan Allen Interiors and La-Z-Boy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Ethan Allen Interiors||5.33%||11.31%||7.74%|
Ethan Allen Interiors pays an annual dividend of $0.76 per share and has a dividend yield of 2.6%. La-Z-Boy pays an annual dividend of $0.44 per share and has a dividend yield of 1.6%. Ethan Allen Interiors pays out 51.7% of its earnings in the form of a dividend. La-Z-Boy pays out 27.2% 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. La-Z-Boy has increased its dividend for 6 consecutive years.
Ethan Allen Interiors beats La-Z-Boy on 10 of the 17 factors compared between the two stocks.
About Ethan Allen Interiors
Ethan Allen Interiors Inc. is an interior design company. The Company is a manufacturer and retailer of home furnishings. The Company operates through two segments, which include wholesale and retail. The Company is an international home fashion brand doing business in North America, Europe, Asia and the Middle East. It offers complimentary interior design service to its clients and sells a range of furniture products and decorative accents through ethanallen.com and a network of design centers in the United States and abroad. Its wholesale segment, principally involved in the development of the Ethan Allen brand, encompasses various aspects of design, manufacture, sourcing, sale, and distribution of its range of home furnishings and accents. The Company’s retail segment sells home furnishings and accents to consumers through a network of Company-operated design centers. As of June 30, 2016, the Company owned and operated nine manufacturing facilities.
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.
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