Critical Contrast: Hooker Furnishings (NASDAQ:HOFT) & Installed Building Products (NYSE:IBP)

Hooker Furnishings (NASDAQ:HOFT) and Installed Building Products (NYSE:IBP) are both consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, earnings, valuation, risk, profitability, institutional ownership and analyst recommendations.

Institutional & Insider Ownership

73.6% of Hooker Furnishings shares are held by institutional investors. Comparatively, 99.6% of Installed Building Products shares are held by institutional investors. 2.7% of Hooker Furnishings shares are held by insiders. Comparatively, 13.8% of Installed Building Products shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Hooker Furnishings has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500. Comparatively, Installed Building Products has a beta of 1.71, suggesting that its stock price is 71% more volatile than the S&P 500.

Valuation and Earnings

This table compares Hooker Furnishings and Installed Building Products”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hooker Furnishings	$278.14 million	0.51	-$26.97 million	($1.69)	-7.86
Installed Building Products	$2.97 billion	1.72	$265.40 million	$9.29	20.73

Installed Building Products has higher revenue and earnings than Hooker Furnishings. Hooker Furnishings is trading at a lower price-to-earnings ratio than Installed Building Products, indicating that it is currently the more affordable of the two stocks.

Dividends

Hooker Furnishings pays an annual dividend of $0.46 per share and has a dividend yield of 3.5%. Installed Building Products pays an annual dividend of $1.56 per share and has a dividend yield of 0.8%. Hooker Furnishings pays out -27.2% of its earnings in the form of a dividend. Installed Building Products pays out 16.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Hooker Furnishings has raised its dividend for 9 consecutive years. Hooker Furnishings is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Hooker Furnishings and Installed Building Products, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hooker Furnishings	1	1	0	0	1.50
Installed Building Products	1	10	2	0	2.08

Installed Building Products has a consensus price target of $245.36, suggesting a potential upside of 27.39%. Given Installed Building Products’ stronger consensus rating and higher probable upside, analysts plainly believe Installed Building Products is more favorable than Hooker Furnishings.

Profitability

This table compares Hooker Furnishings and Installed Building Products’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hooker Furnishings	-6.62%	4.32%	3.20%
Installed Building Products	8.46%	42.12%	13.20%

Summary

Installed Building Products beats Hooker Furnishings on 14 of the 17 factors compared between the two stocks.

About Hooker Furnishings

Hooker Furnishings Corporation designs, manufactures, imports, and markets residential household, hospitality, and contract furniture. It operates in three segments: Hooker Branded, Home Meridian, and Domestic Upholstery. The Hooker Branded segment offers design categories, including home entertainment, home office, accent, dining, and bedroom furniture under the Hooker Furniture brand; and imported upholstered furniture under the Hooker Upholstery brand. The Home Meridian segment provides home furnishings under the Accentrics Home brand; a range of bedroom, dining room, accent, display cabinet, home office, and youth furnishings under the Pulaski Furniture and Samuel Lawrence Furniture brands; and imported leather motion upholstery under the Prime Resources International brand. This segment also designs and supplies hotel furnishings for four and five-star hotels under the Samuel Lawrence Hospitality brand name. The Domestic Upholstery segment offers motion and stationary leather furniture under the Bradington-Young brand; chairs, sofas, sectionals, recliners, and a variety of accent upholstery pieces under the HF Custom brand; and upholstered furniture, such as private label sectionals, modulars, sofas, chairs, ottomans, benches, beds, and dining chairs for lifestyle specialty retailers under the Shenandoah Furniture brand. This segment also designs and manufactures outdoor furniture under the Sunset West brand. The company supplies upholstered seating and casegoods to upscale senior living and assisted living facilities through designers, design firms, industry dealers, and distributors under the H Contract brand; and interior designer products under the Lifestyle Brands name; and lighting, accessories, and home décor products under the BOBO Intriguing Objects brand. It sells home furnishing products through retailers, such as independent furniture stores, department stores, mass merchants, national chains, catalog merchants, interior designers, and e-commerce retailers primarily in North America. Hooker Furnishings Corporation was incorporated in 1924 and is headquartered in Martinsville, Virginia.

About Installed Building Products

Installed Building Products, Inc., together with its subsidiaries, engages in the installation of insulation, waterproofing, fire-stopping, fireproofing, garage doors, rain gutters, window blinds, shower doors, closet shelving and mirrors, and other products in the United States. It operates through Installation, Distribution, and Manufacturing operation segments. The company offers a range of insulation materials, such as fiberglass and cellulose, and spray foam insulation materials. It is also involved in the installation of insulation and sealant materials in various areas of a structure, which includes basement and crawl space, building envelope, attic, and acoustical applications. In addition, the company installs a range of caulk and sealant products that control air infiltration in residential and commercial buildings; and waterproofing options, including sheet and hot applied waterproofing membranes, as well as deck coating, bentonite, and air and vapor systems. Further, it distributes spray foam insulation, metal building insulation, residential insulation, and mechanical and fabricated Styrofoam insulation, as well as accessories and equipment used in the insulation installation process; and manufactures cellulose insulation and specialty industrial fibers. It serves homebuilders, multi-family and commercial and agricultural construction firms, individual homeowners, and repair and remodeling contractors. The company was formerly known as CCIB Holdco, Inc. Installed Building Products, Inc. was founded in 1977 and is based in Columbus, Ohio.