Williams-Sonoma (NYSE:WSM) vs. Ethan Allen Interiors (NYSE:ETD) Critical Survey

Ethan Allen Interiors (NYSE:ETD) and Williams-Sonoma (NYSE:WSM) are both retail/wholesale companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, analyst recommendations, dividends, earnings, institutional ownership and valuation.

Institutional & Insider Ownership

83.8% of Ethan Allen Interiors shares are held by institutional investors. Comparatively, 99.3% of Williams-Sonoma shares are held by institutional investors. 10.5% of Ethan Allen Interiors shares are held by company insiders. Comparatively, 1.1% of Williams-Sonoma 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.

Profitability

This table compares Ethan Allen Interiors and Williams-Sonoma’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ethan Allen Interiors	8.39%	10.92%	7.10%
Williams-Sonoma	14.35%	52.79%	21.64%

Dividends

Ethan Allen Interiors pays an annual dividend of $1.56 per share and has a dividend yield of 5.5%. Williams-Sonoma pays an annual dividend of $2.64 per share and has a dividend yield of 1.4%. Ethan Allen Interiors pays out 77.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Williams-Sonoma pays out 29.9% of its earnings in the form of a dividend. Ethan Allen Interiors has raised its dividend for 1 consecutive years and Williams-Sonoma has raised its dividend for 20 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings for Ethan Allen Interiors and Williams-Sonoma, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ethan Allen Interiors	0	2	0	0	2.00
Williams-Sonoma	1	10	7	1	2.42

Ethan Allen Interiors currently has a consensus target price of $30.00, indicating a potential upside of 5.26%. Williams-Sonoma has a consensus target price of $178.41, indicating a potential downside of 4.94%. Given Ethan Allen Interiors’ higher possible upside, research analysts clearly believe Ethan Allen Interiors is more favorable than Williams-Sonoma.

Risk and Volatility

Ethan Allen Interiors has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500. Comparatively, Williams-Sonoma has a beta of 1.47, meaning that its share price is 47% more volatile than the S&P 500.

Earnings & Valuation

This table compares Ethan Allen Interiors and Williams-Sonoma”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ethan Allen Interiors	$614.65 million	1.18	$63.82 million	$2.01	14.18
Williams-Sonoma	$7.71 billion	2.99	$1.13 billion	$8.83	21.25

Williams-Sonoma has higher revenue and earnings than Ethan Allen Interiors. Ethan Allen Interiors is trading at a lower price-to-earnings ratio than Williams-Sonoma, indicating that it is currently the more affordable of the two stocks.

Summary

Williams-Sonoma beats Ethan Allen Interiors on 15 of the 18 factors compared between the two stocks.

About Ethan Allen Interiors

Ethan Allen Interiors Inc. operates as an interior design company, and manufacturer and retailer of home furnishings in the United States, Mexico, Honduras, and Canada. The company operates in two segments, Wholesale and Retail. Its products include case goods items, such as beds, dressers, armoires, tables, chairs, buffets, entertainment units, home office furniture, and wooden accents; upholstery comprising fabric-covered items, such as sleepers, recliners and other motion furniture, chairs, ottomans, custom pillows, sofas, loveseats, cut fabrics, and leather; and home accent items consisting of window treatments and drapery hardware, wall decors, florals, lighting, clocks, mattresses, bedspreads, throws, pillows, decorative accents, area rugs, wall coverings, and home and garden furnishings. The company markets and sells its products under the Ethan Allen brand through home furnishing retail networks and independent retailers, as well as through ethanallen.com website. It operates a network of design centers. Ethan Allen Interiors Inc. was founded in 1932 and is headquartered in Danbury, Connecticut.

About Williams-Sonoma

Williams-Sonoma, Inc. operates as an omni-channel specialty retailer of various products for home. It offers cooking, dining, and entertaining products, such as cookware, tools, electrics, cutlery, tabletop and bar, outdoor, furniture, and a library of cookbooks under the Williams Sonoma Home brand, as well as home furnishings and decorative accessories under the Williams Sonoma lifestyle brand; and furniture, bedding, lighting, rugs, table essentials, and decorative accessories under the Pottery Barn brand. The company also provides home decor products under the West Elm brand; kids accessories under the Pottery Barn Kids brand; and an organic bedding to multi-purpose furniture under the Pottery Barn Teen brand. In addition, it offers made-to-order lighting, hardware, furniture, and home decors inspired by history under the Rejuvenation brand; personalized products and custom gifts under the Mark and Graham brand; and colorful and vintage-inspired heirloom products under the GreenRow, as well as operates a 3-D imaging and augmented reality platform for the home furnishings and décor industry under the Outward brand. The company markets its products through e-commerce websites, direct-mail catalogs, and retail stores. Williams-Sonoma, Inc. was founded in 1956 and is headquartered in San Francisco, California.