Culp (NYSE:CULP – Get Free Report) and Superior Group of Companies (NASDAQ:SGC – Get Free Report) are both small-cap consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.
Institutional and Insider Ownership
75.1% of Culp shares are owned by institutional investors. Comparatively, 33.8% of Superior Group of Companies shares are owned by institutional investors. 7.9% of Culp shares are owned by company insiders. Comparatively, 29.1% of Superior Group of Companies shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Risk & Volatility
Culp has a beta of 1.18, suggesting that its stock price is 18% more volatile than the S&P 500. Comparatively, Superior Group of Companies has a beta of 1.45, suggesting that its stock price is 45% more volatile than the S&P 500.
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Culp | $203.48 million | 0.22 | -$19.10 million | ($0.81) | -4.25 |
| Superior Group of Companies | $566.18 million | 0.35 | $7.00 million | $0.55 | 22.87 |
Superior Group of Companies has higher revenue and earnings than Culp. Culp is trading at a lower price-to-earnings ratio than Superior Group of Companies, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Culp and Superior Group of Companies’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Culp | -5.24% | -12.53% | -5.70% |
| Superior Group of Companies | 1.44% | 5.29% | 2.47% |
Dividends
Culp pays an annual dividend of $0.46 per share and has a dividend yield of 13.4%. Superior Group of Companies pays an annual dividend of $0.56 per share and has a dividend yield of 4.5%. Culp pays out -56.8% of its earnings in the form of a dividend. Superior Group of Companies pays out 101.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Culp is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Recommendations
This is a breakdown of current ratings and price targets for Culp and Superior Group of Companies, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Culp | 1 | 0 | 0 | 1 | 2.50 |
| Superior Group of Companies | 0 | 1 | 1 | 0 | 2.50 |
Superior Group of Companies has a consensus price target of $18.00, suggesting a potential upside of 43.08%. Given Superior Group of Companies’ higher probable upside, analysts plainly believe Superior Group of Companies is more favorable than Culp.
Summary
Superior Group of Companies beats Culp on 12 of the 16 factors compared between the two stocks.
About Culp
Culp, Inc. manufactures, sources, markets, and sells mattress fabrics, sewn covers, and cut and sewn kits for use in mattresses, foundations, and other bedding products in the United States, North America, the Far East, Asia, and internationally. It operates in two segments, Mattress Fabrics and Upholstery Fabrics. The Mattress Fabrics segment offers woven jacquard, knitted, and converted fabrics for use in the production of bedding products, including mattresses, box springs, foundations, and top of bed components. The Upholstery Fabrics segment provides jacquard woven fabrics, velvets, micro denier suedes, woven dobbies, knitted fabrics, piece-dyed woven products, and polyurethane fabrics for use in the production of residential and commercial upholstered furniture, such as sofas, recliners, loveseats, chairs, sectionals, and sofa-beds, as well as office seating and window treatment products; and installation services for customers in the hospitality and commercial industries. Culp, Inc. was incorporated in 1972 and is headquartered in High Point, North Carolina.
About Superior Group of Companies
Superior Group of Companies, Inc. manufactures and sells apparel and accessories in the United States and internationally. It operates through three segments: Branded Products, Healthcare Apparel, and Contact Centers. The Branded Products segment produces and sells customized merchandising solutions, promotional products, and branded uniform to chain retailer, food service, entertainment, technology, transportation, and other industries under BAMKO and HPI brands. The Healthcare Apparel segment manufactures and sells healthcare apparel, such as scrubs, lab coats, protective apparel, and patient gowns under the Fashion Seal Healthcare, CID Resources and Wink, and Carhartt brand names. This segment sells healthcare service apparel to healthcare laundries, dealers, distributors, and physical and e-commerce retailers. The Contact Centers segment offers outsourced, nearshore business process outsourcing, and contact and call-center support services. The company was formerly known as Superior Uniform Group, Inc. and changed its name to Superior Group of Companies, Inc. in May 2018. Superior Group of Companies, Inc. was founded in 1920 and is headquartered in St. Petersburg, Florida.
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