Reviewing Sleep Number (SNBR) & Hooker Furniture (HOFT)

Hooker Furniture (NASDAQ: HOFT) and Sleep Number (NASDAQ:SNBR) are both small-cap consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, institutional ownership, earnings, valuation and profitability.

Risk & Volatility

Hooker Furniture has a beta of 0.64, meaning that its stock price is 36% less volatile than the S&P 500. Comparatively, Sleep Number has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500.

Profitability

This table compares Hooker Furniture and Sleep Number’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hooker Furniture 4.96% 14.89% 9.63%
Sleep Number 4.34% 51.12% 14.26%

Valuation and Earnings

This table compares Hooker Furniture and Sleep Number’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hooker Furniture $577.22 million 0.86 $25.28 million $2.64 15.93
Sleep Number $1.31 billion 1.14 $51.41 million $1.41 26.54

Sleep Number has higher revenue and earnings than Hooker Furniture. Hooker Furniture is trading at a lower price-to-earnings ratio than Sleep Number, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

86.5% of Hooker Furniture shares are owned by institutional investors. 2.9% of Hooker Furniture shares are owned by insiders. Comparatively, 4.0% of Sleep Number shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

Hooker Furniture pays an annual dividend of $0.48 per share and has a dividend yield of 1.1%. Sleep Number does not pay a dividend. Hooker Furniture pays out 18.2% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent recommendations for Hooker Furniture and Sleep Number, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hooker Furniture 0 0 0 0 N/A
Sleep Number 1 3 3 0 2.29

Sleep Number has a consensus target price of $33.40, suggesting a potential downside of 10.74%. Given Sleep Number’s higher probable upside, analysts plainly believe Sleep Number is more favorable than Hooker Furniture.

Summary

Sleep Number beats Hooker Furniture on 10 of the 15 factors compared between the two stocks.

Hooker Furniture Company Profile

Hooker Furniture Corporation is a home furnishings marketing, design and logistics company offering sourcing of residential casegoods and upholstery, as well as domestically-produced leather and fabric-upholstered furniture. The Company operates through three segments: casegoods furniture, upholstered furniture and all other. The Company’s casegoods product categories include accents, home office, dining, bedroom and home entertainment furniture under the Hooker Furniture brand. Its residential upholstered seating companies include Bradington-Young, which is engaged in upscale motion and stationary leather furniture, and Sam Moore Furniture, which is engaged in upscale occasional chairs, settees, sofas and sectional seating with a focus on cover-to-frame customization. It also markets a line of imported leather upholstery under the Hooker Upholstery trade name. All other segment operates under the H Contract and Homeware brands.

Sleep Number Company Profile

Sleep Number Corporation, formerly Select Comfort Corporation, is a designer, manufacturer, marketer, retailer and servicer of a line of Sleep Number beds. The Company offers consumers individualized sleep solutions and services, which include a complete line of Sleep Number beds, bases and bedding accessories. Its Sleep Number bed offers SleepIQ technology sensors that work directly with the bed’s DualAir technology to track each individual’s sleep. The Sleep Number bedding collection comprises a line of sleep products that are designed to solve sleep issues. It offers FlextFit adjustable bases, and Sleep Number pillows, sheets and other bedding products. It offers Sleep Number beds in ranges within the mattress category, and in a range of sizes, including twin, full, queen, eastern king and California king. It also offers an assortment of temperature-balancing products.

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