Critical Review: Bassett Furniture Industries (NASDAQ:BSET) & Cavco Industries (NASDAQ:CVCO)

Bassett Furniture Industries (NASDAQ:BSET) and Cavco Industries (NASDAQ:CVCO) are both consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, profitability, dividends, earnings and analyst recommendations.

Insider and Institutional Ownership

54.4% of Bassett Furniture Industries shares are owned by institutional investors. Comparatively, 95.6% of Cavco Industries shares are owned by institutional investors. 7.3% of Bassett Furniture Industries shares are owned by insiders. Comparatively, 1.7% of Cavco Industries shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and target prices for Bassett Furniture Industries and Cavco Industries, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bassett Furniture Industries	0	1	0	2	3.33
Cavco Industries	1	2	1	1	2.40

Cavco Industries has a consensus price target of $700.00, suggesting a potential upside of 15.30%. Given Cavco Industries’ higher possible upside, analysts plainly believe Cavco Industries is more favorable than Bassett Furniture Industries.

Profitability

This table compares Bassett Furniture Industries and Cavco Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bassett Furniture Industries	1.65%	3.56%	1.83%
Cavco Industries	7.89%	16.51%	12.17%

Valuation and Earnings

This table compares Bassett Furniture Industries and Cavco Industries”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bassett Furniture Industries	$335.28 million	0.51	$6.10 million	$0.64	30.67
Cavco Industries	$2.24 billion	2.08	$190.55 million	$22.98	26.42

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

Risk and Volatility

Bassett Furniture Industries has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500. Comparatively, Cavco Industries has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500.

Summary

Cavco Industries beats Bassett Furniture Industries on 11 of the 15 factors compared between the two stocks.

About Bassett Furniture Industries

Bassett Furniture Industries, Incorporated, together with its subsidiaries, manufactures, markets, and retails home furnishings in the United States and internationally. It operates in three segments: Wholesale, Retail Company-Owned Stores, and Corporate and Other. The company engages in the design, manufacture, sourcing, sale, and distribution of furniture products, including dining, bedroom and bedding, home decorations, rugs, and outdoor furniture to a network of company-owned retail stores, licensee-owned stores, and independent retailers. The company also distributes its products through multi-line furniture stores, including Bassett galleries or design centers, as well as sells online; and engages in wood and upholstery operations. In addition, it owns and leases land, retail store properties, warehouses, and distribution centers. Bassett Furniture Industries, Incorporated was founded in 1902 and is based in Bassett, Virginia.

About Cavco Industries

Cavco Industries, Inc. designs, produces, and retails factory-built homes primarily in the United States. It operates in two segments, Factory-Built Housing and Financial Services. The company markets its factory-built homes under the Cavco, Fleetwood, Palm Harbor, Nationwide, Fairmont, Friendship, Chariot Eagle, Destiny, Commodore, Colony, Pennwest, R-Anell, Manorwood, MidCountry, and Solitaire brands. It produces park model RVs; vacation cabins; and factory-built commercial structures, including apartment buildings, condominiums, hotels, workforce housing, schools, and housing for the United States military troops. In addition, the company produces various modular homes, which include single and multi-section ranch, split-level, and Cape Cod style homes, as well as two- and three-story homes, and multi-family units. Further, it provides conforming and non-conforming mortgages and home-only loans to purchasers of various brands of factory-built homes sold by company-owned retail stores, as well as various independent distributors, builders, communities, and developers. Additionally, the company offers property and casualty insurance to owners of manufactured homes. It distributes its products through a network of independent and company-owned retailers, planned community operators, and residential developers. Cavco Industries, Inc. was founded in 1965 and is headquartered in Phoenix, Arizona.