Comparing Virco Manufacturing (NASDAQ:VIRC) and Natuzzi (NYSE:NTZ)

Virco Manufacturing (NASDAQ:VIRC) and Natuzzi (NYSE:NTZ) are both small-cap consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, profitability, earnings, analyst recommendations and risk.

Volatility and Risk

Virco Manufacturing has a beta of 0.4, indicating that its share price is 60% less volatile than the S&P 500. Comparatively, Natuzzi has a beta of 0.14, indicating that its share price is 86% less volatile than the S&P 500.

Profitability

This table compares Virco Manufacturing and Natuzzi’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Virco Manufacturing	5.74%	12.04%	6.85%
Natuzzi	-5.66%	-29.05%	-5.45%

Analyst Recommendations

This is a summary of recent recommendations for Virco Manufacturing and Natuzzi, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Virco Manufacturing	0	1	1	0	2.50
Natuzzi	0	0	0	0	0.00

Virco Manufacturing presently has a consensus price target of $17.00, indicating a potential upside of 113.30%. Given Virco Manufacturing’s stronger consensus rating and higher probable upside, equities analysts plainly believe Virco Manufacturing is more favorable than Natuzzi.

Earnings & Valuation

This table compares Virco Manufacturing and Natuzzi”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Virco Manufacturing	$236.93 million	0.53	$21.64 million	$0.87	9.16
Natuzzi	$345.01 million	0.12	-$16.39 million	N/A	N/A

Virco Manufacturing has higher earnings, but lower revenue than Natuzzi.

Insider and Institutional Ownership

31.0% of Virco Manufacturing shares are held by institutional investors. Comparatively, 6.1% of Natuzzi shares are held by institutional investors. 18.1% of Virco Manufacturing shares are held by insiders. Comparatively, 0.6% of Natuzzi shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Virco Manufacturing beats Natuzzi on 11 of the 12 factors compared between the two stocks.

About Virco Manufacturing

Virco Mfg. Corporation engages in the design, production, and distribution of furniture in the United States and Canada. The company offers seating products, including 4-leg chairs, cantilever chairs, mobile task chairs and lab stools, tablet armchairs, steel-frame and floor rockers, series stools, hard plastic seating, folding and upholstered stack chairs, and plastic stack and upholstered ergonomic chairs. It also provides activity, butcher block, folding, office, technology, and mobile tables; desks and workstations, and instructor media stations and towers; chair desks and combo units, tablet arm and caster units, mobile workstations, student desks, and returns and credenzas; and computer furniture solutions. In addition, the company provides administrative office furniture, including desks, returns, bookcases, and other items, as well as steel storage cabinets, wardrobe tower cabinets, file credenzas, and mobile pedestals; laboratory furniture comprising steel-based science tables, table bases, lab stools, and wood-frame science tables; mobile furniture, such as mobile tables, mobile cabinets, and mobile chairs for school settings and offices; and handling and storage equipment, and stackable storage trucks. It serves public and private educational institutions, charter schools, convention centers and arenas, hospitality providers, government facilities, and places of worship through its sales and support teams, and dealers' network. Virco Mfg. Corporation was incorporated in 1950 and is headquartered in Torrance, California.

About Natuzzi

Natuzzi S.p.A. engages in the design, manufacture, and marketing of leather and fabric upholstered furniture through its own and franchised stores in the United States, Italy, China, Brazil, Spain, Mexico, Canada, Australia, Belgium, the United Arab Emirates, South Korea, Israel, Taiwan, the United Kingdom, and internationally. The company offers stationary furniture, such as sofas, loveseats, and armchairs; sectional furniture; motion furniture; sofa beds; occasional chairs, including recliners and massage chairs; home furnishing accessories, including coffee tables, lamps, rugs, and wall units; and home accessories, which include vases, mirrors, magazines racks, trays, and decorative objects. It also sells polyurethane foam and leather processing by-products. It operates Natuzzi Italia stores; Divani&Divani by Natuzzi stores; and Natuzzi Editions stores. The company was formerly known as Industrie Natuzzi S.p.A. and changed its name to Natuzzi S.p.A. in June 2002. Natuzzi S.p.A. was incorporated in 1959 and is headquartered in Santeramo In Colle, Italy.