Tempur Sealy International (NYSE: TPX) and Sleep Number (NASDAQ:SNBR) are both retail/wholesale companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, valuation, profitability, dividends and institutional ownership.

Volatility and Risk

Tempur Sealy International has a beta of 1.53, meaning that its stock price is 53% more 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.

Earnings & Valuation

This table compares Tempur Sealy International and Sleep Number’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tempur Sealy International $3.13 billion 1.08 $202.10 million $3.00 20.78
Sleep Number $1.31 billion 1.12 $51.41 million $1.41 26.07

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

Analyst Ratings

This is a summary of current ratings for Tempur Sealy International and Sleep Number, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tempur Sealy International 1 7 4 0 2.25
Sleep Number 1 3 3 0 2.29

Tempur Sealy International currently has a consensus price target of $64.29, suggesting a potential upside of 3.14%. Sleep Number has a consensus price target of $33.40, suggesting a potential downside of 9.14%. Given Tempur Sealy International’s higher possible upside, equities research analysts clearly believe Tempur Sealy International is more favorable than Sleep Number.

Profitability

This table compares Tempur Sealy International and Sleep Number’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tempur Sealy International 5.79% 1,042.63% 7.32%
Sleep Number 4.34% 51.12% 14.26%

Summary

Tempur Sealy International beats Sleep Number on 8 of the 12 factors compared between the two stocks.

About Tempur Sealy International

Tempur Sealy International, Inc. is a bedding manufacturer. The Company develops, manufactures, markets and distributes bedding products. The Company operates in two segments: North America and International. The North America segment consists of Tempur and Sealy manufacturing and distribution subsidiaries, joint ventures and licensees located in the United States and Canada. Its International segment consists of Tempur and Sealy manufacturing and distribution subsidiaries, joint ventures and licensees located in Europe, Asia-Pacific and Latin America. Its brand portfolio includes TEMPUR, Tempur-Pedic, Sealy, Sealy Posturepedic, and Stearns & Foster. It offers its products in over two categories, including Bedding, which includes mattresses, foundations and adjustable foundations, and Other, which includes pillows, mattress covers, sheets, cushions and various other comfort products. As of December 31, 2016, it sold its products across the globe in approximately 100 countries.

About Sleep Number

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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