Lennar (NYSE:LEN – Get Free Report) and Flexsteel Industries (NASDAQ:FLXS – Get Free Report) are both consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.
Analyst Recommendations
This is a summary of current ratings and price targets for Lennar and Flexsteel Industries, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Lennar | 11 | 7 | 1 | 0 | 1.47 |
| Flexsteel Industries | 0 | 2 | 1 | 1 | 2.75 |
Lennar currently has a consensus price target of $79.00, indicating a potential downside of 7.55%. Flexsteel Industries has a consensus price target of $86.00, indicating a potential upside of 13.80%. Given Flexsteel Industries’ stronger consensus rating and higher possible upside, analysts clearly believe Flexsteel Industries is more favorable than Lennar.
Earnings & Valuation
This table compares Lennar and Flexsteel Industries”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Lennar | $34.19 billion | 0.59 | $2.08 billion | $5.29 | 16.15 |
| Flexsteel Industries | $459.18 million | 0.68 | $33.13 million | $6.14 | 12.31 |
Lennar has higher revenue and earnings than Flexsteel Industries. Flexsteel Industries is trading at a lower price-to-earnings ratio than Lennar, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Lennar has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500. Comparatively, Flexsteel Industries has a beta of 0.51, suggesting that its stock price is 49% less volatile than the S&P 500.
Dividends
Lennar pays an annual dividend of $2.00 per share and has a dividend yield of 2.3%. Flexsteel Industries pays an annual dividend of $1.00 per share and has a dividend yield of 1.3%. Lennar pays out 37.8% of its earnings in the form of a dividend. Flexsteel Industries pays out 16.3% 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. Lennar has increased its dividend for 1 consecutive years and Flexsteel Industries has increased its dividend for 1 consecutive years.
Insider and Institutional Ownership
81.1% of Lennar shares are held by institutional investors. Comparatively, 36.3% of Flexsteel Industries shares are held by institutional investors. 10.1% of Lennar shares are held by company insiders. Comparatively, 11.2% of Flexsteel Industries shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Profitability
This table compares Lennar and Flexsteel Industries’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Lennar | 4.09% | 6.15% | 4.00% |
| Flexsteel Industries | 6.75% | 15.11% | 9.01% |
Summary
Flexsteel Industries beats Lennar on 10 of the 16 factors compared between the two stocks.
About Lennar
Lennar Corporation, together with its subsidiaries, operates as a homebuilder primarily under the Lennar brand in the United States. It operates through Homebuilding East, Homebuilding Central, Homebuilding Texas, Homebuilding West, Financial Services, Multifamily, and Lennar Other segments. The company’s homebuilding operations include the construction and sale of single-family attached and detached homes, as well as the purchase, development, and sale of residential land; and development, construction, and management of multifamily rental properties. It also offers residential mortgage financing, title, insurance, and closing services for home buyers and others, as well as originates and sells securitization commercial mortgage loans. In addition, the company is involved in the fund investment activity. It primarily serves first-time, move-up, active adult, and luxury homebuyers. Lennar Corporation was founded in 1954 and is based in Miami, Florida.
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.
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