Head to Head Analysis: Lowe’s Companies (NYSE:LOW) and Tile Shop (NASDAQ:TTSH)

Tile Shop (NASDAQ:TTSH) and Lowe’s Companies (NYSE:LOW) are both consumer cyclical companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, dividends, risk and institutional ownership.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Tile Shop and Lowe’s Companies, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tile Shop	0	0	0	0	N/A
Lowe’s Companies	0	11	13	0	2.54

Lowe’s Companies has a consensus target price of $268.42, indicating a potential downside of 4.76%. Given Lowe’s Companies’ higher possible upside, analysts clearly believe Lowe’s Companies is more favorable than Tile Shop.

Profitability

This table compares Tile Shop and Lowe’s Companies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tile Shop	1.50%	4.47%	1.67%
Lowe’s Companies	8.25%	-47.07%	15.79%

Volatility & Risk

Tile Shop has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500. Comparatively, Lowe’s Companies has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500.

Earnings and Valuation

This table compares Tile Shop and Lowe’s Companies”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tile Shop	$359.68 million	0.82	$10.07 million	$0.21	31.52
Lowe’s Companies	$84.02 billion	1.91	$7.73 billion	$12.45	22.64

Lowe’s Companies has higher revenue and earnings than Tile Shop. Lowe’s Companies is trading at a lower price-to-earnings ratio than Tile Shop, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

36.7% of Tile Shop shares are owned by institutional investors. Comparatively, 74.1% of Lowe’s Companies shares are owned by institutional investors. 36.6% of Tile Shop shares are owned by insiders. Comparatively, 0.3% of Lowe’s Companies shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Lowe’s Companies beats Tile Shop on 9 of the 13 factors compared between the two stocks.

About Tile Shop

Tile Shop Holdings, Inc. operates as a specialty retailer of natural stone and man-made tiles, setting and maintenance materials, and related accessories in the United States. The company offers natural stone products, including marble, travertine, granite, quartz, sandstone, slate, and onyx tiles; and man-made products, comprises ceramic, porcelain, glass, cement, wood look, and metal and luxury vinyl tile. It also manufactures setting and maintenance materials, such as thinset, grout, and sealers; and accessories which includes installation tools, shower and bath shelves, drains, and related products. In addition, the company offers customers delivery service through third-party freight providers. It sells its products under the Superior Adhesives & Chemicals, Superior Tools & Supplies, Rush River, and Fired Earth brands. Tile Shop Holdings, Inc. was founded in 1985 and is headquartered in Plymouth, Minnesota.

About Lowe’s Companies

Lowe’s Companies, Inc., together with its subsidiaries, operates as a home improvement retailer in the United States. The company offers a line of products for construction, maintenance, repair, remodeling, and decorating. It also provides home improvement products, such as appliances, seasonal and outdoor living, lawn and garden, lumber, kitchens and bath, tools, paint, millwork, hardware, flooring, rough plumbing, building materials, décor, and electrical. In addition, the company offers installation services through independent contractors in various product categories; and extended protection plans and repair services. It sells its national brand-name merchandise and private brand products to professional customers, homeowners, renters, businesses, and government. The company also sells its products through Lowes.com website; and through mobile applications. Lowe’s Companies, Inc. was founded in 1921 and is based in Mooresville, North Carolina.