Critical Contrast: Ethan Allen Interiors (NYSE:ETD) & La-Z-Boy (NYSE:LZB)

Ethan Allen Interiors (NYSE:ETD) and La-Z-Boy (NYSE:LZB) are both small-cap consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.

Earnings and Valuation

This table compares Ethan Allen Interiors and La-Z-Boy”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ethan Allen Interiors	$579.49 million	0.92	$39.88 million	$1.56	13.49
La-Z-Boy	$2.13 billion	0.56	$101.99 million	$1.97	15.07

La-Z-Boy has higher revenue and earnings than Ethan Allen Interiors. Ethan Allen Interiors 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.

Profitability

This table compares Ethan Allen Interiors and La-Z-Boy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ethan Allen Interiors	6.88%	7.88%	5.17%
La-Z-Boy	3.86%	11.79%	6.12%

Volatility & Risk

Ethan Allen Interiors has a beta of 1.03, meaning that its share price is 3% more volatile than the S&P 500. Comparatively, La-Z-Boy has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500.

Institutional & Insider Ownership

83.8% of Ethan Allen Interiors shares are held by institutional investors. Comparatively, 99.6% of La-Z-Boy shares are held by institutional investors. 9.9% of Ethan Allen Interiors 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 hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Ethan Allen Interiors pays an annual dividend of $1.56 per share and has a dividend yield of 7.4%. La-Z-Boy pays an annual dividend of $0.97 per share and has a dividend yield of 3.3%. Ethan Allen Interiors pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. La-Z-Boy pays out 49.2% of its earnings in the form of a dividend. Ethan Allen Interiors has increased its dividend for 1 consecutive years and La-Z-Boy has increased its dividend for 4 consecutive years.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Ethan Allen Interiors and La-Z-Boy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ethan Allen Interiors	1	2	0	0	1.67
La-Z-Boy	1	1	3	0	2.40

Ethan Allen Interiors currently has a consensus target price of $22.00, indicating a potential upside of 4.53%. La-Z-Boy has a consensus target price of $39.50, indicating a potential upside of 33.03%. Given La-Z-Boy’s stronger consensus rating and higher probable upside, analysts clearly believe La-Z-Boy is more favorable than Ethan Allen Interiors.

Summary

La-Z-Boy beats Ethan Allen Interiors on 13 of the 17 factors compared between the two stocks.

About Ethan Allen Interiors

Ethan Allen Interiors Inc. operates as an interior design company, and manufacturer and retailer of home furnishings in the United States, Mexico, Honduras, and Canada. The company operates in two segments, Wholesale and Retail. Its products include case goods items, such as beds, dressers, armoires, tables, chairs, buffets, entertainment units, home office furniture, and wooden accents; upholstery comprising fabric-covered items, such as sleepers, recliners and other motion furniture, chairs, ottomans, custom pillows, sofas, loveseats, cut fabrics, and leather; and home accent items consisting of window treatments and drapery hardware, wall decors, florals, lighting, clocks, mattresses, bedspreads, throws, pillows, decorative accents, area rugs, wall coverings, and home and garden furnishings. The company markets and sells its products under the Ethan Allen brand through home furnishing retail networks and independent retailers, as well as through ethanallen.com website. It operates a network of design centers. Ethan Allen Interiors Inc. was founded in 1932 and is headquartered in Danbury, Connecticut.

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.