Critical Comparison: La-Z-Boy (LZB) vs. Tempur Sealy International (NYSE:TPX)

La-Z-Boy (NYSE: LZB) and Tempur Sealy International (NYSE:TPX) are both consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, institutional ownership, dividends, valuation, analyst recommendations, profitabiliy and risk.

Valuation and Earnings

This table compares La-Z-Boy and Tempur Sealy International’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
La-Z-Boy $1.52 billion 1.04 $159.71 million $1.74 18.74
Tempur Sealy International $2.98 billion 1.09 $434.00 million $3.51 17.22

Tempur Sealy International has higher revenue and earnings than La-Z-Boy. Tempur Sealy International 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.

Profitability

This table compares La-Z-Boy and Tempur Sealy International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
La-Z-Boy 5.65% 14.82% 10.19%
Tempur Sealy International 6.69% 617.75% 8.15%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for La-Z-Boy and Tempur Sealy International, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
La-Z-Boy 0 3 1 0 2.25
Tempur Sealy International 1 10 0 1 2.08

La-Z-Boy presently has a consensus target price of $31.33, suggesting a potential downside of 3.89%. Tempur Sealy International has a consensus target price of $60.13, suggesting a potential downside of 0.54%. Given Tempur Sealy International’s higher possible upside, analysts clearly believe Tempur Sealy International is more favorable than La-Z-Boy.

Volatility and Risk

La-Z-Boy has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500. Comparatively, Tempur Sealy International has a beta of 1.67, indicating that its share price is 67% more volatile than the S&P 500.

Insider and Institutional Ownership

83.8% of La-Z-Boy shares are held by institutional investors. 3.2% of La-Z-Boy shares are held by insiders. Comparatively, 2.1% of Tempur Sealy International 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.

Dividends

La-Z-Boy pays an annual dividend of $0.44 per share and has a dividend yield of 1.3%. Tempur Sealy International does not pay a dividend. La-Z-Boy pays out 25.3% of its earnings in the form of a dividend.

Summary

Tempur Sealy International beats La-Z-Boy on 10 of the 17 factors compared between the two stocks.

La-Z-Boy Company Profile

La-Z-Boy Incorporated manufactures, markets, imports, exports, distributes and retails upholstery furniture products. The Company also imports, distributes and retails accessories and casegoods (wood) furniture products. The Company’s segments include the Upholstery segment, the Casegoods segment and the Retail segment. The Company is the producer of reclining chairs and manufacturer/distributor of residential furniture in the United States. The Company sells its products, primarily in the United States and Canada, as well as internationally, to furniture retailers and directly to consumers through stores that it owns and operates. The Company has a network of approximately 340 La-Z-Boy Furniture Galleries stores and over 560 Comfort Studio locations. The Company owns approximately 120 of the La-Z-Boy Furniture Galleries stores. The Company’s other brands include England, Kincaid, American Drew and Hammary.

Tempur Sealy International Company Profile

Tempur Sealy International, Inc. is a bedding manufacturer. The Company develops, manufactures, markets and distributes bedding products. The Company operates in two segments: North America and International. The North America segment consists of Tempur and Sealy manufacturing and distribution subsidiaries, joint ventures and licensees located in the United States and Canada. Its International segment consists of Tempur and Sealy manufacturing and distribution subsidiaries, joint ventures and licensees located in Europe, Asia-Pacific and Latin America. Its brand portfolio includes TEMPUR, Tempur-Pedic, Sealy, Sealy Posturepedic, and Stearns & Foster. It offers its products in over two categories, including Bedding, which includes mattresses, foundations and adjustable foundations, and Other, which includes pillows, mattress covers, sheets, cushions and various other comfort products. As of December 31, 2016, it sold its products across the globe in approximately 100 countries.

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