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

Profitability

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

Net Margins Return on Equity Return on Assets
Sleep Number 4.34% 51.12% 14.26%
Stanley Furniture -2.34% -10.31% -5.70%

Analyst Recommendations

This is a summary of recent ratings and price targets for Sleep Number and Stanley Furniture, as provided by MarketBeat.

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

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

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sleep Number $1.31 billion 1.14 $51.41 million $1.41 26.54
Stanley Furniture $44.57 million 0.30 -$5.25 million ($0.07) -12.71

Sleep Number has higher revenue and earnings than Stanley Furniture. Stanley 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.

Volatility and Risk

Sleep Number has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500. Comparatively, Stanley Furniture has a beta of 0.21, indicating that its stock price is 79% less volatile than the S&P 500.

Insider & Institutional Ownership

29.1% of Stanley Furniture shares are owned by institutional investors. 4.0% of Sleep Number shares are owned by company insiders. Comparatively, 28.6% of Stanley Furniture shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Sleep Number beats Stanley Furniture on 10 of the 12 factors compared between the two stocks.

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.

Stanley Furniture Company Profile

Stanley Furniture Company, Inc. is a design, marketing and sourcing resource in the wood residential furniture market. The Company’s segment is sale of residential wood furniture products. The Company markets its brands through a network of brick-and-mortar furniture retailers, online retailers and interior designers around the world. The Company’s products are marketed under the Stanley Furniture brand, but also under sub-brands, including Coastal Living and Stone & Leigh. The Company’s products are marketed as wood residential home furnishings and include a range of offerings for the home, including dining, bedroom, living room, home office, home entertainment, accent items, and nursery and youth furniture. The Company provides products in a range of wood species and finishes. The Company’s product is sourced from independently owned factories in Southeast Asia, primarily in Vietnam.

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