Critical Analysis: Hooker Furnishings (NASDAQ:HOFT) versus Dorel Industries (OTCMKTS:DIIBF)

Dorel Industries (OTCMKTS:DIIBF) and Hooker Furnishings (NASDAQ:HOFT) are both small-cap consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, valuation, analyst recommendations, institutional ownership, profitability and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for Dorel Industries and Hooker Furnishings, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dorel Industries	0	2	0	0	2.00
Hooker Furnishings	0	0	0	0	0.00

Volatility and Risk

Dorel Industries has a beta of 1.77, suggesting that its share price is 77% more volatile than the S&P 500. Comparatively, Hooker Furnishings has a beta of 1.37, suggesting that its share price is 37% more volatile than the S&P 500.

Institutional & Insider Ownership

73.6% of Hooker Furnishings shares are owned by institutional investors. 19.3% of Dorel Industries shares are owned by insiders. Comparatively, 2.2% of Hooker Furnishings shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Dorel Industries and Hooker Furnishings”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dorel Industries	$1.38 billion	0.03	-$171.96 million	($5.51)	-0.19
Hooker Furnishings	$397.46 million	0.28	-$12.51 million	($1.09)	-9.68

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Dorel Industries	-13.31%	-142.16%	-13.61%
Hooker Furnishings	-2.95%	-3.41%	-2.22%

Summary

Hooker Furnishings beats Dorel Industries on 7 of the 12 factors compared between the two stocks.

About Dorel Industries

Dorel Industries Inc. engages in the design, manufacture, sourcing, marketing, and distribution of home and juvenile products worldwide. The company operates through Dorel Home and Dorel Juvenile segments. The Dorel Home segment offers ready-to assemble furniture and home furnishings products, including metal folding furniture, futons, children's furniture, step stools, hand trucks, ladders, outdoor furniture, and other imported furniture items. This segment markets its products under the DHP, Signature Sleep, Little Seeds, Ameriwood Home, Cosco Home & Office, Queer Eye, Cosmo Living, Novogratz, Real Rooms, Mr. Kate, Baby Relax, Alphason, Bertini, Ntense, and Notio brands. The Dorel Juvenile segment provides children's accessories comprising infant car seats, strollers, home equipment, toys, infant health, and safety aids under the Maxi-Cosi, Tiny Love, Infanti, Safety 1st, Bébé Confort, Quinny, and Cosco brands. The company was formerly known as Dorel Co. Ltd. and changed its name to Dorel Industries Inc. in May 1987. Dorel Industries Inc. was incorporated in 1962 and is headquartered in Westmount, Canada.

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.