Leggett & Platt (NYSE:LEG) & MasterBrand (NYSE:MBC) Critical Contrast

Leggett & Platt (NYSE:LEG) and MasterBrand (NYSE:MBC) are both small-cap consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, earnings and profitability.

Analyst Recommendations

This is a breakdown of recent ratings for Leggett & Platt and MasterBrand, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Leggett & Platt	1	3	0	0	1.75
MasterBrand	1	0	1	0	2.00

Leggett & Platt currently has a consensus target price of $9.67, indicating a potential downside of 1.02%. MasterBrand has a consensus target price of $15.00, indicating a potential upside of 14.64%. Given MasterBrand’s stronger consensus rating and higher possible upside, analysts plainly believe MasterBrand is more favorable than Leggett & Platt.

Institutional & Insider Ownership

64.2% of Leggett & Platt shares are held by institutional investors. Comparatively, 87.3% of MasterBrand shares are held by institutional investors. 1.6% of Leggett & Platt shares are held by insiders. Comparatively, 2.0% of MasterBrand shares are held 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.

Volatility & Risk

Leggett & Platt has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, MasterBrand has a beta of 1.43, suggesting that its stock price is 43% more volatile than the S&P 500.

Valuation & Earnings

This table compares Leggett & Platt and MasterBrand”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Leggett & Platt	$4.38 billion	0.30	-$511.50 million	$1.03	9.48
MasterBrand	$2.70 billion	0.61	$125.90 million	$0.72	18.17

MasterBrand has lower revenue, but higher earnings than Leggett & Platt. Leggett & Platt is trading at a lower price-to-earnings ratio than MasterBrand, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Leggett & Platt and MasterBrand’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Leggett & Platt	3.36%	19.42%	3.96%
MasterBrand	3.37%	11.88%	5.28%

Summary

MasterBrand beats Leggett & Platt on 11 of the 14 factors compared between the two stocks.

About Leggett & Platt

Leggett & Platt, Inc. engages in the manufacture and distribution of furniture and engineered components and products among homes, offices, automobiles, and commercial aircraft. It operates through the following segments: Bedding Products, Specialized Products, and Furniture, Flooring & Textile Products. The Bedding Products segment supplies products and components for the home, including mattress springs and specialty foam, as well as adjustable beds, bedding machinery, steel rod, and drawn wire. The Specialized Products segment supplies titanium, nickel, and stainless-steel tubing for the aerospace industry, and serves the construction market with its hydraulic cylinders group. The Flooring, Furniture & Textile Products segment produces an extensive line of components and engineered systems for office, residential, and contract furniture manufacturers. The company was founded by J. P. Products and C. B. Platt in 1883 and is headquartered in Carthage, MO.

About MasterBrand

MasterBrand, Inc. engages in the manufacture and sale of residential cabinets in the United States and Canada. The company offers a range of residential cabinetry products for the kitchen, bathroom, and other parts of the home. It sells its products to remodeling and new construction markets through dealers, retailers, and builders. The company was formerly known as United Cabinet Incorporated. MasterBrand, Inc. was founded in 1954 and is headquartered in Beachwood, Ohio.