Head-To-Head Contrast: D.R. Horton (NYSE:DHI) vs. Sleep Number (NASDAQ:SNBR)

D.R. Horton (NYSE:DHI) and Sleep Number (NASDAQ:SNBR) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, institutional ownership, valuation and profitability.

Profitability

This table compares D.R. Horton and Sleep Number’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
D.R. Horton	9.15%	12.47%	8.59%
Sleep Number	-12.98%	N/A	-16.48%

Institutional and Insider Ownership

90.6% of D.R. Horton shares are owned by institutional investors. Comparatively, 85.7% of Sleep Number shares are owned by institutional investors. 0.7% of D.R. Horton shares are owned by insiders. Comparatively, 3.6% of Sleep Number shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

D.R. Horton has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500. Comparatively, Sleep Number has a beta of 2.49, indicating that its share price is 149% more volatile than the S&P 500.

Valuation and Earnings

This table compares D.R. Horton and Sleep Number”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
D.R. Horton	$34.25 billion	1.24	$3.59 billion	$10.51	14.43
Sleep Number	$1.34 billion	0.00	-$131.96 million	($7.56)	-0.02

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

Analyst Ratings

This is a breakdown of recent recommendations for D.R. Horton and Sleep Number, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
D.R. Horton	0	10	5	0	2.33
Sleep Number	2	2	0	0	1.50

D.R. Horton currently has a consensus target price of $166.92, indicating a potential upside of 10.05%. Sleep Number has a consensus target price of $3.50, indicating a potential upside of 2,700.00%. Given Sleep Number’s higher possible upside, analysts plainly believe Sleep Number is more favorable than D.R. Horton.

Summary

D.R. Horton beats Sleep Number on 11 of the 14 factors compared between the two stocks.

About D.R. Horton

D.R. Horton, Inc. operates as a homebuilding company in East, North, Southeast, South Central, Southwest, and Northwest regions in the United States. It engages in the acquisition and development of land; and construction and sale of residential homes in 118 markets across 33 states under the names of D.R. Horton, America’s Builder, Express Homes, Emerald Homes, and Freedom Homes. The company constructs and sells single-family detached homes; and attached homes, such as townhomes, duplexes, and triplexes. It also provides mortgage financing services; and title insurance policies, and examination and closing services, as well as engages in the residential lot development business. In addition, the company develops, constructs, owns, leases, and sells multi-family and single-family rental properties; and owns non-residential real estate, including ranch land and improvements. It primarily serves homebuyers. D.R. Horton, Inc. was founded in 1978 and is headquartered in Arlington, Texas.

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.