Hooker Furnishings (NASDAQ:HOFT – Get Free Report) and Lennar (NYSE:LEN – Get Free Report) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, profitability, dividends, institutional ownership, risk and earnings.
Institutional and Insider Ownership
73.6% of Hooker Furnishings shares are held by institutional investors. Comparatively, 81.1% of Lennar shares are held by institutional investors. 2.7% of Hooker Furnishings shares are held by company insiders. Comparatively, 10.1% of Lennar shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Analyst Ratings
This is a summary of current recommendations and price targets for Hooker Furnishings and Lennar, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Hooker Furnishings | 1 | 1 | 0 | 0 | 1.50 |
| Lennar | 11 | 7 | 1 | 0 | 1.47 |
Lennar has a consensus target price of $78.87, suggesting a potential downside of 14.27%. Given Lennar’s higher probable upside, analysts clearly believe Lennar is more favorable than Hooker Furnishings.
Volatility & Risk
Hooker Furnishings has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500. Comparatively, Lennar has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500.
Dividends
Hooker Furnishings pays an annual dividend of $0.46 per share and has a dividend yield of 3.0%. Lennar pays an annual dividend of $2.00 per share and has a dividend yield of 2.2%. Hooker Furnishings pays out -27.2% of its earnings in the form of a dividend. Lennar pays out 37.8% 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. Hooker Furnishings has raised its dividend for 9 consecutive years and Lennar has raised its dividend for 1 consecutive years. Hooker Furnishings is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
This table compares Hooker Furnishings and Lennar’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Hooker Furnishings | -6.62% | 4.32% | 3.20% |
| Lennar | 4.09% | 6.15% | 4.00% |
Valuation and Earnings
This table compares Hooker Furnishings and Lennar”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Hooker Furnishings | $278.14 million | 0.59 | -$26.97 million | ($1.69) | -9.14 |
| Lennar | $34.19 billion | 0.64 | $2.08 billion | $5.29 | 17.39 |
Lennar has higher revenue and earnings than Hooker Furnishings. Hooker Furnishings is trading at a lower price-to-earnings ratio than Lennar, indicating that it is currently the more affordable of the two stocks.
Summary
Lennar beats Hooker Furnishings on 13 of the 17 factors compared between the two stocks.
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.
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.
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