Head to Head Analysis: Flexsteel Industries (NASDAQ:FLXS) versus Garmin (NYSE:GRMN)

Flexsteel Industries (NASDAQ:FLXS) and Garmin (NYSE:GRMN) are both consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, valuation, profitability, dividends, risk and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Flexsteel Industries and Garmin, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Flexsteel Industries	0	2	1	1	2.75
Garmin	1	5	3	1	2.40

Flexsteel Industries presently has a consensus price target of $86.00, indicating a potential upside of 17.12%. Garmin has a consensus price target of $315.29, indicating a potential upside of 9.91%. Given Flexsteel Industries’ stronger consensus rating and higher possible upside, analysts clearly believe Flexsteel Industries is more favorable than Garmin.

Insider & Institutional Ownership

36.3% of Flexsteel Industries shares are held by institutional investors. Comparatively, 81.6% of Garmin shares are held by institutional investors. 11.2% of Flexsteel Industries shares are held by insiders. Comparatively, 14.8% of Garmin shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Flexsteel Industries and Garmin”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Flexsteel Industries	$459.18 million	0.67	$33.13 million	$6.14	11.96
Garmin	$7.25 billion	7.63	$1.66 billion	$10.42	27.53

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

Volatility & Risk

Flexsteel Industries has a beta of 0.61, suggesting that its share price is 39% less volatile than the S&P 500. Comparatively, Garmin has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500.

Dividends

Flexsteel Industries pays an annual dividend of $1.00 per share and has a dividend yield of 1.4%. Garmin pays an annual dividend of $4.20 per share and has a dividend yield of 1.5%. Flexsteel Industries pays out 16.3% of its earnings in the form of a dividend. Garmin pays out 40.3% 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. Flexsteel Industries has increased its dividend for 1 consecutive years and Garmin has increased its dividend for 8 consecutive years. Garmin is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Flexsteel Industries and Garmin’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Flexsteel Industries	6.75%	15.92%	9.31%
Garmin	25.58%	21.94%	17.81%

Summary

Garmin beats Flexsteel Industries on 14 of the 17 factors compared between the two stocks.

About Flexsteel Industries

Flexsteel Industries, Inc., together with its subsidiaries, operates as a manufacturer, importer, and markets of upholstered furniture for residential and contract markets in the United States. It provides upholstered furniture, such as sofas, loveseats, chairs, reclining rocking chairs, swivel rockers, sofa beds, convertible bedding units, occasional tables, desks, dining tables and chairs, kitchen storage, bedroom furniture, and outdoor furniture. The company distributes its products through e-commerce channels and dealer sales force. It also engages in export related activities. Flexsteel Industries, Inc. was founded in 1893 and is based in Dubuque, Iowa.

About Garmin

Garmin Ltd. designs, develops, manufactures, markets, and distributes a range of wireless devices worldwide. Its Fitness segment offers running and multi-sport watches; cycling products; smartwatch devices; scales and monitors; and fitness accessories. This segment also provides Garmin Connect and Garmin Connect Mobile, which are web and mobile platforms where users can track and analyze their fitness, activities and workouts, and wellness data; and Connect IQ, an application development platform. The company's Outdoor segment offers adventure watches, outdoor handhelds and satellite communicators, golf devices, consumer automotive devices, and dog devices, as well as InReach and Gramin response communication device. Its Aviation segment designs, manufactures, and markets various aircraft avionics solutions, including integrated flight decks, electronic flight displays and instrumentation, navigation and communication products, automatic flight control systems and safety-enhancing technologies, audio control systems, engine indication systems, traffic awareness and avoidance solutions, ADS-B and transponders, weather information and avoidance solutions, datalink and connectivity solutions, and various services. The company's Marine segment provides chartplotters and multi-function displays, cartography products, fishfinders, sonar products, autopilot systems, radars, compliant instrument displays and sensors, VHF communication radios, handhelds and wearable devices, sailing products, audio products and accessories, digital switching products, and trolling motors. Its Auto segment offers embedded domain controllers and infotainment units; and software, map database, cameras, wearables, and automotive solutions. The company sells its products through independent retailers, dealers, distributors, installation and repair shops, and original equipment manufacturers, as well as online webshop. Garmin Ltd. was founded in 1989 and is based in Schaffhausen, Switzerland.