Luvu Brands (OTCMKTS:LUVU) and Cavco Industries (NASDAQ:CVCO) Head to Head Review

Cavco Industries (NASDAQ:CVCO) and Luvu Brands (OTCMKTS:LUVU) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, dividends, profitability, risk and institutional ownership.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Cavco Industries and Luvu Brands, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cavco Industries	1	2	1	1	2.40
Luvu Brands	0	0	0	0	0.00

Cavco Industries presently has a consensus target price of $700.00, suggesting a potential upside of 20.16%. Given Cavco Industries’ stronger consensus rating and higher possible upside, research analysts clearly believe Cavco Industries is more favorable than Luvu Brands.

Insider & Institutional Ownership

95.6% of Cavco Industries shares are owned by institutional investors. 1.7% of Cavco Industries shares are owned by insiders. Comparatively, 45.9% of Luvu Brands 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.

Profitability

This table compares Cavco Industries and Luvu Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cavco Industries	7.89%	16.51%	12.17%
Luvu Brands	-4.23%	-53.41%	-10.68%

Earnings and Valuation

This table compares Cavco Industries and Luvu Brands”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cavco Industries	$2.24 billion	2.00	$190.55 million	$22.98	25.35
Luvu Brands	$24.69 million	0.09	-$450,000.00	($0.01)	-3.00

Cavco Industries has higher revenue and earnings than Luvu Brands. Luvu Brands is trading at a lower price-to-earnings ratio than Cavco Industries, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Cavco Industries has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500. Comparatively, Luvu Brands has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500.

Summary

Cavco Industries beats Luvu Brands on 14 of the 15 factors compared between the two stocks.

About Cavco Industries

Cavco Industries, Inc. designs, produces, and retails factory-built homes primarily in the United States. It operates in two segments, Factory-Built Housing and Financial Services. The company markets its factory-built homes under the Cavco, Fleetwood, Palm Harbor, Nationwide, Fairmont, Friendship, Chariot Eagle, Destiny, Commodore, Colony, Pennwest, R-Anell, Manorwood, MidCountry, and Solitaire brands. It produces park model RVs; vacation cabins; and factory-built commercial structures, including apartment buildings, condominiums, hotels, workforce housing, schools, and housing for the United States military troops. In addition, the company produces various modular homes, which include single and multi-section ranch, split-level, and Cape Cod style homes, as well as two- and three-story homes, and multi-family units. Further, it provides conforming and non-conforming mortgages and home-only loans to purchasers of various brands of factory-built homes sold by company-owned retail stores, as well as various independent distributors, builders, communities, and developers. Additionally, the company offers property and casualty insurance to owners of manufactured homes. It distributes its products through a network of independent and company-owned retailers, planned community operators, and residential developers. Cavco Industries, Inc. was founded in 1965 and is headquartered in Phoenix, Arizona.

About Luvu Brands

Luvu Brands, Inc. designs, manufactures, and markets various consumer lifestyle products worldwide. The company offers sensuality and intimacy products under the Liberator brand; and bed therapy products, which assistive in relieving medical conditions associated with acid reflux, surgery recovery, and chronic pain under the Avana brand. It also provides daybeds, sofas, and beanbags made from virgin and re-purposed polyurethane foam under the Jaxx brand. In addition, the company is involved in the purchase and resale of products to e-merchants, retailers, and e-commerce sites, as well as provision of contract manufacturing and fulfillment services. It markets its products through various websites comprising liberator.com, jaxxliving.com, and avanacomfort.com, as well as through distributors, retailers, and e-tailers across various channels of adult, mass market, drug, and specialty accounts. The company was formerly known as Liberator, Inc. and changed its name to Luvu Brands, Inc. in November 2015. Luvu Brands, Inc. was incorporated in 1999 and is headquartered in Atlanta, Georgia.