Mohawk Industries (MHK) & Dorel Industries (DIIBF) Critical Analysis

Mohawk Industries (NYSE: MHK) and Dorel Industries (OTCMKTS:DIIBF) are both consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, valuation, dividends, risk and profitability.

Insider and Institutional Ownership

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78.7% of Mohawk Industries shares are owned by institutional investors. Comparatively, 0.8% of Dorel Industries shares are owned by institutional investors. 17.0% of Mohawk Industries shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for Mohawk Industries and Dorel Industries, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mohawk Industries 0 3 13 0 2.81
Dorel Industries 0 0 0 0 N/A

Mohawk Industries currently has a consensus price target of $292.36, suggesting a potential upside of 26.80%. Given Mohawk Industries’ higher probable upside, analysts clearly believe Mohawk Industries is more favorable than Dorel Industries.

Profitability

This table compares Mohawk Industries and Dorel Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mohawk Industries 10.24% 15.44% 8.81%
Dorel Industries 1.19% 6.48% 3.13%

Earnings & Valuation

This table compares Mohawk Industries and Dorel Industries’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mohawk Industries $9.49 billion 1.81 $971.63 million $12.98 17.76
Dorel Industries $2.58 billion 0.29 $30.58 million $0.94 24.80

Mohawk Industries has higher revenue and earnings than Dorel Industries. Mohawk Industries is trading at a lower price-to-earnings ratio than Dorel Industries, indicating that it is currently the more affordable of the two stocks.

Dividends

Dorel Industries pays an annual dividend of $1.20 per share and has a dividend yield of 5.1%. Mohawk Industries does not pay a dividend. Dorel Industries pays out 127.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk and Volatility

Mohawk Industries has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500. Comparatively, Dorel Industries has a beta of 1.23, indicating that its stock price is 23% more volatile than the S&P 500.

Summary

Mohawk Industries beats Dorel Industries on 13 of the 15 factors compared between the two stocks.

About Mohawk Industries

Mohawk Industries, Inc. designs, manufactures, sources, distributes, and markets flooring products for remodeling and new constructions of residential and commercial spaces worldwide. It operates through three segments: Global Ceramic, Flooring North America (Flooring NA), and Flooring Rest of the World (Flooring ROW). The Global Ceramic segment provides a range of ceramic tile, porcelain tile, and natural stone products; and sources, markets, and distributes other tile related products. This segment markets and distributes its products under the American Olean, Daltile, EmilGroup, KAI, Kerama Marazzi, Marazzi, and Ragno brands. The Flooring NA segment offers floor covering product lines in a range of colors, textures, and patterns, including carpets, rugs, carpet padS, hardwood, laminate, luxury vinyl tiles, and sheet vinyl products. This segment markets and distributes its flooring products under the Aladdin, Columbia Flooring, Durkan, Horizon, IVC, Karastan, Mohawk, Pergo, Portico, Quick-Step, and SmartStrand brands. The Flooring ROW segment provides laminate, hardwood flooring, and vinyl flooring, as well as roofing elements, insulation boards, medium-density fiberboards, and chipboards products under the Balterio, IVC, Moduleo, Pergo, Quick-Step, and Unilin and Xtratherm brands; and licenses patents related to flooring manufacturers. The company sells its products through independent distributors, home centers, company-operated service centers and stores, floor covering retailers, ceramic specialists, commercial contractors, commercial end users, mass merchandisers, department stores, shop at home, buying groups, retailers, and wholesalers, as well as private labeling programs. Mohawk Industries, Inc. was founded in 1988 and is headquartered in Calhoun, Georgia.

About Dorel Industries

Dorel Industries Inc is a Canada-based global consumer products company which designs, manufactures and distributes a portfolio of product brands. The Company markets its products in the United States, Europe, Latin America, Canada, and Asia. The Company operates through three segments: Dorel Juvenile, Dorel Sports and Dorel Home Furnishings. The Company’s Dorel Juvenile segment is engaged in designing, sourcing, manufacturing, distribution and retailing of children’s furniture and accessories. The Company’s Dorel Sports segment is engaged in designing, sourcing, manufacturing and distribution of recreational and leisure products and accessories. The Company’s Dorel Home Furnishings segment is engaged in designing, sourcing, manufacturing and distribution of ready-to-assemble (RTA) furniture and home furnishings. The Company’s brands include Cannondale, Schwinn, GT, Mongoose, Caloi, Quinny, Maxi-Cosi, Tiny Love, Cosco, Infanti, Voyage, Angel, Disney and Eddie Bauer.

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