D.R. Horton (NYSE:DHI) versus Crown Crafts (NASDAQ:CRWS) Critical Analysis

Crown Crafts (NASDAQ:CRWS) and D.R. Horton (NYSE:DHI) are both consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, institutional ownership, dividends, profitability, analyst recommendations and earnings.

Dividends

Crown Crafts pays an annual dividend of $0.32 per share and has a dividend yield of 11.1%. D.R. Horton pays an annual dividend of $1.80 per share and has a dividend yield of 1.2%. Crown Crafts pays out 68.1% of its earnings in the form of a dividend. D.R. Horton pays out 17.1% 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. D.R. Horton has increased its dividend for 10 consecutive years.

Profitability

This table compares Crown Crafts and D.R. Horton’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Crown Crafts	5.99%	12.79%	6.84%
D.R. Horton	9.15%	12.47%	8.59%

Analyst Recommendations

This is a summary of current recommendations and price targets for Crown Crafts and D.R. Horton, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Crown Crafts	0	1	0	0	2.00
D.R. Horton	0	10	5	0	2.33

D.R. Horton has a consensus price target of $166.92, suggesting a potential upside of 13.10%. Given D.R. Horton’s stronger consensus rating and higher probable upside, analysts clearly believe D.R. Horton is more favorable than Crown Crafts.

Insider and Institutional Ownership

30.2% of Crown Crafts shares are owned by institutional investors. Comparatively, 90.6% of D.R. Horton shares are owned by institutional investors. 12.3% of Crown Crafts shares are owned by insiders. Comparatively, 0.7% of D.R. Horton shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Crown Crafts has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500. Comparatively, D.R. Horton has a beta of 1.37, meaning that its share price is 37% more volatile than the S&P 500.

Valuation and Earnings

This table compares Crown Crafts and D.R. Horton”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Crown Crafts	$82.27 million	0.38	$1.84 million	$0.47	6.11
D.R. Horton	$34.25 billion	1.21	$3.59 billion	$10.51	14.04

D.R. Horton has higher revenue and earnings than Crown Crafts. Crown Crafts is trading at a lower price-to-earnings ratio than D.R. Horton, indicating that it is currently the more affordable of the two stocks.

Summary

D.R. Horton beats Crown Crafts on 14 of the 17 factors compared between the two stocks.

About Crown Crafts

Crown Crafts, Inc., through its subsidiaries, operates in the consumer products industry in the United States and internationally. It provides infant, toddler, and juvenile products, including infant and toddler beddings; blankets and swaddle blankets; dolls and plush toys; nursery and toddler accessories; room décors; reusable and disposable bibs; burp cloths; hooded bath towels and washcloths; reusable and disposable placemats, and floor mats; disposable toilet seat covers and changing mats; developmental toys; feeding and care goods; and other infant, toddler, and juvenile soft goods. The company sells its products primarily to mass merchants, large chain stores, mid-tier retailers, juvenile specialty stores, value channel stores, grocery and drug stores, restaurants, internet accounts, wholesale clubs and internet-based retailers through a network of sales force and independent commissioned sales representatives. Crown Crafts, Inc. was incorporated in 1957 and is headquartered in Gonzales, Louisiana.

About D.R. Horton

D.R. Horton, Inc. operates as a homebuilding company in East, North, Southeast, South Central, Southwest, and Northwest regions in the United States. It engages in the acquisition and development of land; and construction and sale of residential homes in 118 markets across 33 states under the names of D.R. Horton, America’s Builder, Express Homes, Emerald Homes, and Freedom Homes. The company constructs and sells single-family detached homes; and attached homes, such as townhomes, duplexes, and triplexes. It also provides mortgage financing services; and title insurance policies, and examination and closing services, as well as engages in the residential lot development business. In addition, the company develops, constructs, owns, leases, and sells multi-family and single-family rental properties; and owns non-residential real estate, including ranch land and improvements. It primarily serves homebuyers. D.R. Horton, Inc. was founded in 1978 and is headquartered in Arlington, Texas.