Dream Finders Homes (NYSE:DFH – Get Free Report) and Sleep Number (NASDAQ:SNBR – Get Free Report) are both small-cap consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, analyst recommendations, risk, profitability, dividends and earnings.
Insider & Institutional Ownership
95.6% of Dream Finders Homes shares are owned by institutional investors. Comparatively, 85.7% of Sleep Number shares are owned by institutional investors. 66.0% of Dream Finders Homes shares are owned by insiders. Comparatively, 3.6% of Sleep Number shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Profitability
This table compares Dream Finders Homes and Sleep Number’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Dream Finders Homes | 3.55% | 10.38% | 3.79% |
| Sleep Number | -12.98% | N/A | -16.48% |
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Dream Finders Homes | 2 | 3 | 0 | 1 | 2.00 |
| Sleep Number | 2 | 2 | 0 | 0 | 1.50 |
Sleep Number has a consensus price target of $3.50, indicating a potential upside of 2,700.00%. Given Sleep Number’s higher probable upside, analysts plainly believe Sleep Number is more favorable than Dream Finders Homes.
Valuation & Earnings
This table compares Dream Finders Homes and Sleep Number”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Dream Finders Homes | $4.13 billion | 0.16 | $217.20 million | $1.43 | 5.19 |
| Sleep Number | $1.34 billion | 0.00 | -$131.96 million | ($7.56) | -0.02 |
Dream Finders Homes has higher revenue and earnings than Sleep Number. Sleep Number is trading at a lower price-to-earnings ratio than Dream Finders Homes, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Dream Finders Homes has a beta of 1.91, suggesting that its stock price is 91% more volatile than the S&P 500. Comparatively, Sleep Number has a beta of 2.49, suggesting that its stock price is 149% more volatile than the S&P 500.
Summary
Dream Finders Homes beats Sleep Number on 12 of the 14 factors compared between the two stocks.
About Dream Finders Homes
Dream Finders Homes, Inc. operates as a holding company for Dream Finders Holdings LLC that engages in homebuilding business in the United States. It designs, constructs, and sells single-family entry-level, and first-time and second time move-up homes in Charlotte, Raleigh, Jacksonville, Orlando, Denver, the Washington D.C. metropolitan area, Austin, Dallas, and Houston. The company also operates as a licensed home mortgage broker that underwrites, originates, and sells mortgages to Prime Lending; and provides insurance agency services, including closing, escrow, and title insurance, as well as mortgage banking solutions. It sells its homes through its sales representatives and independent real estate brokers. The company was founded in 2008 and is headquartered in Jacksonville, Florida.
About Sleep Number
Sleep Number Corporation, together with its subsidiaries, offers sleep solutions and services in the United States. The company designs, manufactures, markets, retails, and services beds, pillows, sheets, and other bedding products under the Sleep Number name. It also provides smart adjustable bases under the FlextFit brand, and smart beds under the Climate 360 name. The company sells its products directly to consumers through retail, online, phone, chat, and other. The company was formerly known as Select Comfort Corporation and changed its name to Sleep Number Corporation in November 2017. Sleep Number Corporation was incorporated in 1987 and is headquartered in Minneapolis, Minnesota.
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