Bassett Furniture Industries (NASDAQ:BSET) versus Ethan Allen Interiors (NYSE:ETD) Critical Comparison

Bassett Furniture Industries (NASDAQ:BSET) and Ethan Allen Interiors (NYSE:ETD) are both small-cap consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, valuation, dividends, earnings, risk, analyst recommendations and institutional ownership.

Earnings and Valuation

This table compares Bassett Furniture Industries and Ethan Allen Interiors’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bassett Furniture Industries $385.86 million 0.46 -$10.42 million $0.48 37.85
Ethan Allen Interiors $685.17 million 0.89 $60.01 million $2.37 10.20

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Bassett Furniture Industries and Ethan Allen Interiors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bassett Furniture Industries 0 0 1 0 3.00
Ethan Allen Interiors 0 0 0 0 N/A

Bassett Furniture Industries currently has a consensus target price of $29.00, suggesting a potential upside of 59.60%. Given Bassett Furniture Industries’ higher probable upside, research analysts clearly believe Bassett Furniture Industries is more favorable than Ethan Allen Interiors.

Dividends

Bassett Furniture Industries pays an annual dividend of $0.56 per share and has a dividend yield of 3.1%. Ethan Allen Interiors pays an annual dividend of $1.00 per share and has a dividend yield of 4.1%. Bassett Furniture Industries pays out 116.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ethan Allen Interiors pays out 42.2% of its earnings in the form of a dividend. Ethan Allen Interiors is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Bassett Furniture Industries and Ethan Allen Interiors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bassett Furniture Industries 4.18% 11.89% 4.61%
Ethan Allen Interiors 8.76% 17.30% 9.14%

Insider and Institutional Ownership

59.9% of Bassett Furniture Industries shares are owned by institutional investors. Comparatively, 85.0% of Ethan Allen Interiors shares are owned by institutional investors. 6.9% of Bassett Furniture Industries shares are owned by insiders. Comparatively, 11.3% of Ethan Allen Interiors shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Bassett Furniture Industries has a beta of 1.86, suggesting that its share price is 86% more volatile than the S&P 500. Comparatively, Ethan Allen Interiors has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500.

Summary

Ethan Allen Interiors beats Bassett Furniture Industries on 12 of the 15 factors compared between the two stocks.

About Bassett Furniture Industries

Bassett Furniture Industries, Inc. engages in manufacturing, marketing and retailing home furnishings. It operates through the following segments: Wholesale, Retail, and Logistical Services. The Wholesale segment focuses on the design, manufacture, sourcing, sale and distribution of furniture products. The Retail segment consists of local furniture stores, regional furniture retailers, national department, chain stores and single-vendor branded retailers. The Logistical Services segment offers shipping, delivery, and warehousing services. The company was founded by John David Bassett, Sr. in 1902 and is headquartered in Bassett, VA.

About Ethan Allen Interiors

Ethan Allen Interiors, Inc. is engaged in manufacturing home furnishings and accessories. The firm offers a full complement of home decorating and design solutions through its home furnishing retail networks. It operates through two segments: Wholesale, and Retail. The Wholesale segment develops the brand of the company, encompasses all aspects of design, manufacture, sourcing, marketing, sale and distribution of its broad range of home furnishing and accents. The Retail segment sells home furnishings and accents to consumers through a network of company operated design centers. The company was founded in 1932 and is headquartered in Danbury, CT.

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