Contrasting Cavco Industries (NASDAQ:CVCO) and Stanley Black & Decker (NYSE:SWK)

Cavco Industries (NASDAQ:CVCO) and Stanley Black & Decker (NYSE:SWK) are both consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, risk, profitability and earnings.

Analyst Recommendations

This is a summary of recent ratings and target prices for Cavco Industries and Stanley Black & Decker, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cavco Industries	1	2	1	1	2.40
Stanley Black & Decker	1	6	3	0	2.20

Cavco Industries presently has a consensus target price of $700.00, suggesting a potential upside of 31.94%. Stanley Black & Decker has a consensus target price of $92.88, suggesting a potential upside of 3.75%. Given Cavco Industries’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Cavco Industries is more favorable than Stanley Black & Decker.

Valuation and Earnings

This table compares Cavco Industries and Stanley Black & Decker”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cavco Industries	$2.24 billion	1.82	$190.55 million	$22.98	23.09
Stanley Black & Decker	$15.13 billion	0.89	$401.90 million	$4.10	21.83

Stanley Black & Decker has higher revenue and earnings than Cavco Industries. Stanley Black & Decker is trading at a lower price-to-earnings ratio than Cavco Industries, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Cavco Industries and Stanley Black & Decker’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cavco Industries	7.89%	16.51%	12.17%
Stanley Black & Decker	4.07%	8.78%	3.73%

Insider & Institutional Ownership

95.6% of Cavco Industries shares are held by institutional investors. Comparatively, 87.8% of Stanley Black & Decker shares are held by institutional investors. 1.7% of Cavco Industries shares are held by insiders. Comparatively, 0.7% of Stanley Black & Decker shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Cavco Industries has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500. Comparatively, Stanley Black & Decker has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500.

Summary

Cavco Industries beats Stanley Black & Decker on 12 of the 15 factors compared between the two stocks.

About Cavco Industries

Cavco Industries, Inc. designs, produces, and retails factory-built homes primarily in the United States. It operates in two segments, Factory-Built Housing and Financial Services. The company markets its factory-built homes under the Cavco, Fleetwood, Palm Harbor, Nationwide, Fairmont, Friendship, Chariot Eagle, Destiny, Commodore, Colony, Pennwest, R-Anell, Manorwood, MidCountry, and Solitaire brands. It produces park model RVs; vacation cabins; and factory-built commercial structures, including apartment buildings, condominiums, hotels, workforce housing, schools, and housing for the United States military troops. In addition, the company produces various modular homes, which include single and multi-section ranch, split-level, and Cape Cod style homes, as well as two- and three-story homes, and multi-family units. Further, it provides conforming and non-conforming mortgages and home-only loans to purchasers of various brands of factory-built homes sold by company-owned retail stores, as well as various independent distributors, builders, communities, and developers. Additionally, the company offers property and casualty insurance to owners of manufactured homes. It distributes its products through a network of independent and company-owned retailers, planned community operators, and residential developers. Cavco Industries, Inc. was founded in 1965 and is headquartered in Phoenix, Arizona.

About Stanley Black & Decker

Stanley Black & Decker, Inc. engages in the provision of power and hand tools, and related accessories, products, services and equipment for oil and gas, infrastructure applications, commercial electronic security and monitoring systems, healthcare solutions, and mechanical access solutions. It operates through the Tools and Outdoor and Industrial segments. The Tools and Outdoor segment refers to power tools, hand tools, accessories and storage, and outdoor power equipment product lines. The Industrial segment includes the engineered fastening and infrastructure businesses. The company was founded by Frederick T. Stanley in 1843 and is headquartered in New Britain, CT.