Head-To-Head Review: Hooker Furnishings (NASDAQ:HOFT) & D.R. Horton (NYSE:DHI)

D.R. Horton (NYSE:DHI) and Hooker Furnishings (NASDAQ:HOFT) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, risk, earnings, dividends and institutional ownership.

Risk and Volatility

D.R. Horton has a beta of 1.35, suggesting that its share price is 35% more volatile than the S&P 500. Comparatively, Hooker Furnishings has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500.

Dividends

D.R. Horton pays an annual dividend of $1.80 per share and has a dividend yield of 1.3%. Hooker Furnishings pays an annual dividend of $0.46 per share and has a dividend yield of 3.5%. D.R. Horton pays out 17.1% of its earnings in the form of a dividend. Hooker Furnishings 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. D.R. Horton has increased its dividend for 10 consecutive years and Hooker Furnishings has increased its dividend for 9 consecutive years. Hooker Furnishings is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares D.R. Horton and Hooker Furnishings’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
D.R. Horton	9.15%	12.47%	8.59%
Hooker Furnishings	-6.62%	4.32%	3.20%

Earnings & Valuation

This table compares D.R. Horton and Hooker Furnishings”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
D.R. Horton	$34.25 billion	1.10	$3.59 billion	$10.51	12.84
Hooker Furnishings	$278.14 million	0.51	-$26.97 million	($1.69)	-7.79

D.R. Horton has higher revenue and earnings than Hooker Furnishings. Hooker Furnishings is trading at a lower price-to-earnings ratio than D.R. Horton, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

90.6% of D.R. Horton shares are held by institutional investors. Comparatively, 73.6% of Hooker Furnishings shares are held by institutional investors. 0.7% of D.R. Horton shares are held by insiders. Comparatively, 2.7% of Hooker Furnishings shares are held by 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.

Analyst Ratings

This is a breakdown of current recommendations for D.R. Horton and Hooker Furnishings, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
D.R. Horton	0	11	5	0	2.31
Hooker Furnishings	1	1	0	0	1.50

D.R. Horton presently has a consensus price target of $162.62, indicating a potential upside of 20.46%. Given D.R. Horton’s stronger consensus rating and higher probable upside, research analysts clearly believe D.R. Horton is more favorable than Hooker Furnishings.

Summary

D.R. Horton beats Hooker Furnishings on 14 of the 17 factors compared between the two stocks.

About D.R. Horton

D.R. Horton, Inc. operates as a homebuilding company in East, North, Southeast, South Central, Southwest, and Northwest regions in the United States. It engages in the acquisition and development of land; and construction and sale of residential homes in 118 markets across 33 states under the names of D.R. Horton, America’s Builder, Express Homes, Emerald Homes, and Freedom Homes. The company constructs and sells single-family detached homes; and attached homes, such as townhomes, duplexes, and triplexes. It also provides mortgage financing services; and title insurance policies, and examination and closing services, as well as engages in the residential lot development business. In addition, the company develops, constructs, owns, leases, and sells multi-family and single-family rental properties; and owns non-residential real estate, including ranch land and improvements. It primarily serves homebuyers. D.R. Horton, Inc. was founded in 1978 and is headquartered in Arlington, Texas.

About Hooker Furnishings

Hooker Furnishings Corporation designs, manufactures, imports, and markets residential household, hospitality, and contract furniture. It operates in three segments: Hooker Branded, Home Meridian, and Domestic Upholstery. The Hooker Branded segment offers design categories, including home entertainment, home office, accent, dining, and bedroom furniture under the Hooker Furniture brand; and imported upholstered furniture under the Hooker Upholstery brand. The Home Meridian segment provides home furnishings under the Accentrics Home brand; a range of bedroom, dining room, accent, display cabinet, home office, and youth furnishings under the Pulaski Furniture and Samuel Lawrence Furniture brands; and imported leather motion upholstery under the Prime Resources International brand. This segment also designs and supplies hotel furnishings for four and five-star hotels under the Samuel Lawrence Hospitality brand name. The Domestic Upholstery segment offers motion and stationary leather furniture under the Bradington-Young brand; chairs, sofas, sectionals, recliners, and a variety of accent upholstery pieces under the HF Custom brand; and upholstered furniture, such as private label sectionals, modulars, sofas, chairs, ottomans, benches, beds, and dining chairs for lifestyle specialty retailers under the Shenandoah Furniture brand. This segment also designs and manufactures outdoor furniture under the Sunset West brand. The company supplies upholstered seating and casegoods to upscale senior living and assisted living facilities through designers, design firms, industry dealers, and distributors under the H Contract brand; and interior designer products under the Lifestyle Brands name; and lighting, accessories, and home décor products under the BOBO Intriguing Objects brand. It sells home furnishing products through retailers, such as independent furniture stores, department stores, mass merchants, national chains, catalog merchants, interior designers, and e-commerce retailers primarily in North America. Hooker Furnishings Corporation was incorporated in 1924 and is headquartered in Martinsville, Virginia.