Comparing ON (NYSE:ONON) & Culp (NYSE:CULP)

Culp (NYSE:CULP) and ON (NYSE:ONON) are both consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, analyst recommendations, valuation and dividends.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Culp	-5.24%	-12.53%	-5.70%
ON	12.09%	22.92%	13.33%

Volatility and Risk

Culp has a beta of 1.21, indicating that its stock price is 21% more volatile than the S&P 500. Comparatively, ON has a beta of 2.08, indicating that its stock price is 108% more volatile than the S&P 500.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Culp	$206.76 million	0.24	-$19.10 million	($0.32)	-12.12
ON	$3.64 billion	6.10	$245.87 million	$1.47	23.65

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

Insider & Institutional Ownership

75.1% of Culp shares are held by institutional investors. Comparatively, 36.4% of ON shares are held by institutional investors. 7.9% of Culp shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Culp and ON, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Culp	1	1	0	0	1.50
ON	1	5	20	2	2.82

ON has a consensus price target of $43.33, suggesting a potential upside of 24.65%. Given ON’s stronger consensus rating and higher possible upside, analysts clearly believe ON is more favorable than Culp.

Summary

ON beats Culp on 13 of the 15 factors compared between the two stocks.

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.

About ON

On Holding AG engages in the development and distribution of sports products such as footwear, apparel, and accessories for high-performance running, outdoor, all-day activities, and tennis. It sells its products worldwide through independent retailers and global distributors, its own online presence, and its own stores. The company was founded by David Allemann, Olivier Bernhard, and Caspar Coppetti in January 2010 and is headquartered in Zurich, Switzerland.