La-Z-Boy (NYSE:LZB – Get Free Report) and Smith Douglas Homes (NYSE:SDHC – Get Free Report) 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 analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.
Insider and Institutional Ownership
99.6% of La-Z-Boy shares are held by institutional investors. 3.1% of La-Z-Boy shares are held by company insiders. Comparatively, 84.2% of Smith Douglas Homes shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares La-Z-Boy and Smith Douglas Homes”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| La-Z-Boy | $2.11 billion | 0.54 | $101.99 million | $1.97 | 14.52 |
| Smith Douglas Homes | $1.00 billion | 0.51 | $10.69 million | $0.72 | 13.94 |
La-Z-Boy has higher revenue and earnings than Smith Douglas Homes. Smith Douglas Homes 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.
Analyst Ratings
This is a summary of recent ratings and recommmendations for La-Z-Boy and Smith Douglas Homes, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| La-Z-Boy | 0 | 2 | 3 | 0 | 2.60 |
| Smith Douglas Homes | 1 | 7 | 1 | 0 | 2.00 |
La-Z-Boy currently has a consensus price target of $39.50, indicating a potential upside of 38.06%. Smith Douglas Homes has a consensus price target of $11.38, indicating a potential upside of 13.30%. Given La-Z-Boy’s stronger consensus rating and higher probable upside, analysts clearly believe La-Z-Boy is more favorable than Smith Douglas Homes.
Risk and Volatility
La-Z-Boy has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500. Comparatively, Smith Douglas Homes has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500.
Profitability
This table compares La-Z-Boy and Smith Douglas Homes’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| La-Z-Boy | 3.86% | 11.79% | 6.12% |
| Smith Douglas Homes | 0.64% | -0.19% | -0.14% |
Summary
La-Z-Boy beats Smith Douglas Homes on 13 of the 14 factors compared between the two stocks.
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.
About Smith Douglas Homes
Smith Douglas Homes Corp., together with its subsidiaries, engages in the design, construction, and sale of single-family homes in the southeastern United States. It also provides closing, escrow, and title insurance services. The company sells its products to entry-level and empty-nest homebuyers. Smith Douglas Homes Corp. was founded in 2008 and is headquartered in Woodstock, Georgia.
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