Critical Comparison: Culp (CULP) & Crown Crafts (CRWS)

Culp (NYSE: CULP) and Crown Crafts (NASDAQ:CRWS) are both small-cap consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, risk, institutional ownership, earnings, profitability, valuation and analyst recommendations.

Dividends

Culp pays an annual dividend of $0.36 per share and has a dividend yield of 1.2%. Crown Crafts pays an annual dividend of $0.32 per share and has a dividend yield of 5.5%. Culp pays out 18.1% of its earnings in the form of a dividend. Crown Crafts pays out 58.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.



Profitability

This table compares Culp and Crown Crafts’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Culp 4.46% 13.46% 9.77%
Crown Crafts 5.21% 10.60% 8.26%

Valuation & Earnings

This table compares Culp and Crown Crafts’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Culp $309.54 million 1.24 $22.33 million $1.99 15.55
Crown Crafts $65.98 million 0.89 $5.57 million $0.55 10.55

Culp has higher revenue and earnings than Crown Crafts. Crown Crafts is trading at a lower price-to-earnings ratio than Culp, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and price targets for Culp and Crown Crafts, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Culp 0 0 0 0 N/A
Crown Crafts 0 0 3 0 3.00

Crown Crafts has a consensus price target of $8.00, suggesting a potential upside of 37.93%. Given Crown Crafts’ higher possible upside, analysts clearly believe Crown Crafts is more favorable than Culp.

Institutional & Insider Ownership

86.9% of Culp shares are owned by institutional investors. Comparatively, 42.3% of Crown Crafts shares are owned by institutional investors. 11.4% of Culp shares are owned by insiders. Comparatively, 14.2% of Crown Crafts shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Culp has a beta of 0.16, meaning that its stock price is 84% less volatile than the S&P 500. Comparatively, Crown Crafts has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500.

Summary

Culp beats Crown Crafts on 9 of the 15 factors compared between the two stocks.

Culp Company Profile

Culp, Inc. manufacturers, sources, markets, and sells mattress fabrics, sewn covers, and cut and sewn kits for use in mattresses, foundations, and other bedding products in North America, the Far East, Asia, and internationally. It operates through two segments, Mattress Fabrics and Upholstery Fabrics. The Mattress Fabrics segment offers woven jacquard, knitted, and converted fabrics for use in the production of bedding products, including mattresses, box springs, foundations, and bed components. The Upholstery Fabrics segment provides jacquard woven fabrics, velvets, microdenier suedes, woven dobbies, knitted fabrics, piece-dyed woven products, and polyurethane fabrics for use in the production of residential and commercial upholstered furniture, such as sofas, sofa-beds, chairs, loveseats, recliners, sectionals, office seating, and other institutional settings, as well as for use in fabrics markets. Culp, Inc. was founded in 1972 and is headquartered in High Point, North Carolina.

Crown Crafts Company Profile

Crown Crafts, Inc. operates indirectly through its subsidiaries, Crown Crafts Infant Products, Inc., Hamco, Inc. and Carousel Designs, LLC, in the infant and toddler products segment within the consumer products industry. The Company operates though the segment of infant and toddler products. These products consist of infant and toddler bedding, bibs, soft bath products, disposable products and accessories. Its focus is on infant, toddler and juvenile products, including crib; blankets and swaddle blankets; nursery and toddler accessories; room decor; reusable and disposable bibs; hooded bath towels and washcloths; reusable and disposable placemats and floor mats; disposable cup labels, toilet seat covers and changing mats, and other infant, toddler and juvenile soft goods. Sales of its products are made directly to retailers, which are mass merchants, juvenile specialty stores, value channel stores, grocery and drug stores, restaurants, Internet accounts and wholesale clubs.

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