Smith Douglas Homes (NYSE:SDHC – Get Free Report) and La-Z-Boy (NYSE:LZB – Get Free Report) are both small-cap consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, analyst recommendations, dividends and valuation.
Analyst Recommendations
This is a breakdown of recent ratings and target prices for Smith Douglas Homes and La-Z-Boy, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Smith Douglas Homes | 1 | 7 | 1 | 0 | 2.00 |
| La-Z-Boy | 1 | 1 | 3 | 0 | 2.40 |
Smith Douglas Homes currently has a consensus price target of $11.38, suggesting a potential upside of 8.75%. La-Z-Boy has a consensus price target of $39.50, suggesting a potential upside of 31.78%. Given La-Z-Boy’s stronger consensus rating and higher possible upside, analysts plainly believe La-Z-Boy is more favorable than Smith Douglas Homes.
Volatility & Risk
Smith Douglas Homes has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500. Comparatively, La-Z-Boy has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500.
Institutional and Insider Ownership
99.6% of La-Z-Boy shares are held by institutional investors. 84.2% of Smith Douglas Homes shares are held by company insiders. Comparatively, 3.1% of La-Z-Boy shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Profitability
This table compares Smith Douglas Homes and La-Z-Boy’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Smith Douglas Homes | 0.64% | -0.19% | -0.14% |
| La-Z-Boy | 3.86% | 11.79% | 6.12% |
Earnings and Valuation
This table compares Smith Douglas Homes and La-Z-Boy”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Smith Douglas Homes | $971.12 million | 0.55 | $10.69 million | $0.72 | 14.53 |
| La-Z-Boy | $2.13 billion | 0.56 | $101.99 million | $1.97 | 15.22 |
La-Z-Boy has higher revenue and earnings than Smith Douglas Homes. Smith Douglas Homes is trading at a lower price-to-earnings ratio than La-Z-Boy, indicating that it is currently the more affordable of the two stocks.
Summary
La-Z-Boy beats Smith Douglas Homes on 13 of the 14 factors compared between the two stocks.
About Smith Douglas Homes
Smith Douglas Homes Corp., together with its subsidiaries, engages in the design, construction, and sale of single-family homes in the southeastern United States. It also provides closing, escrow, and title insurance services. The company sells its products to entry-level and empty-nest homebuyers. Smith Douglas Homes Corp. was founded in 2008 and is headquartered in Woodstock, Georgia.
About La-Z-Boy
La-Z-Boy Incorporated manufactures, markets, imports, exports, distributes, and retails upholstery furniture products, accessories, and casegoods furniture products in the United States, Canada, and internationally. It operates through Wholesale, Retail, Corporate and Other segments. The Wholesale segment manufactures, and imports upholstered furniture, such as recliners and motion furniture, sofas, loveseats, chairs, sectionals, modulars, ottomans, and sleeper sofas; and imports, distributes, and retails casegoods (wood) furniture, including occasional pieces, bedroom sets, dining room sets, entertainment centers, and occasional pieces. This segment sells its products directly to La-Z-Boy Furniture Galleries stores, operators of La-Z-Boy Comfort Studio locations, England Custom Comfort Center locations, dealers, and other independent retailers. The Retail segment sells upholstered furniture, casegoods, and other accessories to the end consumer through its retail network. The company also produces reclining chairs; and manufactures and distributes residential furniture. Its Corporate and Other segment sells the products through its website. The company was formerly known as La-Z-Boy Chair Company and changed its name to La-Z-Boy Incorporated in 1996. La-Z-Boy Incorporated was founded in 1927 and is headquartered in Monroe, Michigan.
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