Reviewing Culp (NYSE:CULP) and Under Armour (NYSE:UA)

Under Armour (NYSE:UA) and Culp (NYSE:CULP) 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 analyst recommendations, valuation, dividends, risk, profitability, earnings and institutional ownership.

Profitability

This table compares Under Armour and Culp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Under Armour	-9.99%	4.04%	1.37%
Culp	-5.24%	-12.53%	-5.70%

Insider & Institutional Ownership

36.3% of Under Armour shares are owned by institutional investors. Comparatively, 75.1% of Culp shares are owned by institutional investors. 15.6% of Under Armour shares are owned by company insiders. Comparatively, 7.9% of Culp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Under Armour and Culp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Under Armour	$4.97 billion	0.38	-$495.64 million	($1.15)	-3.80
Culp	$206.76 million	0.23	-$19.10 million	($0.32)	-11.59

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Under Armour and Culp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Under Armour	2	1	0	0	1.33
Culp	1	1	0	0	1.50

Under Armour presently has a consensus target price of $5.50, suggesting a potential upside of 26.00%. Given Under Armour’s higher probable upside, equities research analysts clearly believe Under Armour is more favorable than Culp.

Risk and Volatility

Under Armour has a beta of 1.54, meaning that its stock price is 54% more volatile than the S&P 500. Comparatively, Culp has a beta of 1.19, meaning that its stock price is 19% more volatile than the S&P 500.

Summary

Under Armour beats Culp on 8 of the 13 factors compared between the two stocks.

About Under Armour

Under Armour, Inc., together with its subsidiaries, develops, markets, and distributes performance apparel, footwear, and accessories for men, women, and youth. The company provides its apparel in compression, fitted, and loose fit types. It also offers footwear products for running, training, basketball, cleated sports, recovery, and outdoor applications. In addition, the company provides accessories, which include gloves, bags, headwear, and sports masks; and digital subscription, advertising, and other digital business services. It primarily offers its products under the UNDER ARMOUR, HEATGEAR, COLDGEAR, HOVR, UA, PROTECT THIS HOUSE, I WILL, UA Logo, ARMOUR FLEECE, and ARMOUR BRA brands. The company sells its products through wholesale channels, including national and regional sporting goods chains, independent and specialty retailers, department store chains, mono-branded Under Armour retail stores, institutional athletic departments, and leagues and teams, as well as independent distributors; and directly to consumers through a network of 439 Brand and Factory House stores, as well as through e-commerce websites. It operates in the United States, Canada, Europe, the Middle East, Africa, the Asia-Pacific, and Latin America. Under Armour, Inc. was incorporated in 1996 and is headquartered in Baltimore, Maryland.

About Culp

Culp, Inc. manufactures, sources, markets, and sells mattress fabrics, sewn covers, and cut and sewn kits for use in mattresses, foundations, and other bedding products in the United States, North America, the Far East, Asia, and internationally. It operates in 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 top of bed components. The Upholstery Fabrics segment provides jacquard woven fabrics, velvets, micro denier 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, recliners, loveseats, chairs, sectionals, and sofa-beds, as well as office seating and window treatment products; and installation services for customers in the hospitality and commercial industries. Culp, Inc. was incorporated in 1972 and is headquartered in High Point, North Carolina.