Comparing Mohawk Industries (NYSE:MHK) and Sleep Number (NASDAQ:SNBR)

Mohawk Industries (NYSE:MHK) and Sleep Number (NASDAQ:SNBR) are both consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, valuation, risk, analyst recommendations and earnings.

Earnings & Valuation

This table compares Mohawk Industries and Sleep Number”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mohawk Industries	$10.79 billion	0.78	$369.90 million	$7.55	16.42
Sleep Number	$1.34 billion	0.00	-$131.96 million	($7.56)	-0.02

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

Insider & Institutional Ownership

79.0% of Mohawk Industries shares are held by institutional investors. Comparatively, 85.7% of Sleep Number shares are held by institutional investors. 17.9% of Mohawk Industries shares are held by insiders. Comparatively, 3.6% of Sleep Number shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

Mohawk Industries has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500. Comparatively, Sleep Number has a beta of 2.49, suggesting that its share price is 149% more volatile than the S&P 500.

Profitability

This table compares Mohawk Industries and Sleep Number’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mohawk Industries	4.15%	7.50%	4.60%
Sleep Number	-12.98%	N/A	-16.48%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Mohawk Industries and Sleep Number, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mohawk Industries	1	11	4	1	2.29
Sleep Number	2	2	0	0	1.50

Mohawk Industries presently has a consensus target price of $135.00, indicating a potential upside of 8.90%. Sleep Number has a consensus target price of $3.50, indicating a potential upside of 2,700.00%. Given Sleep Number’s higher possible upside, analysts clearly believe Sleep Number is more favorable than Mohawk Industries.

Summary

Mohawk Industries beats Sleep Number on 12 of the 15 factors compared between the two stocks.

About Mohawk Industries

Mohawk Industries, Inc. designs, manufactures, sources, distributes, and markets flooring products for residential and commercial remodeling, and new construction channels in the United States, Europe, Latin America, and internationally. It operates through three segments: Global Ceramic, Flooring North America, and Flooring Rest of the World. The company provides ceramic, porcelain, and natural stone tiles products for floor and wall applications; natural stones, porcelain slabs, and quartz countertops, as well as installation materials; floor covering products comprising broadloom carpets, carpet tiles, rugs and mats, carpet pads, laminates, medium-density fiberboards, wood floorings, luxury vinyl tiles, and sheet vinyl; and roofing panels, insulation boards, mezzanine flooring products, medium-density fiberboard, and chipboards. It also licenses its intellectual property to flooring manufacturers. The company sells its products under the American Olean, Daltile, Decortiles, Eliane, EmilGroup, KAI, Kerama Marazzi, Marazzi, Ragno, Aladdin Commercial, Durkan, Foss, IVC, Karastan, Mohawk, Mohawk Group, Mohawk Home, Pergo, Portico, Quick-Step, Feltex, GH Commercial, Godfrey Hirst, Hycraft, IVC Commercial, IVC Home, Lentex, Leoline, and Moduleo, Redbook, Unilin, and Vitromex brands. It offers its products to company-owned service centers and stores, company-operated distributors, floor covering retailers, wholesalers, mass merchandisers, department stores, shop at home, buying groups, ceramic tile specialists, e-commerce retailers, residential builders, independent distributors, commercial contractors, and commercial end users. The company was incorporated in 1988 and is headquartered in Calhoun, Georgia.

About Sleep Number

Sleep Number Corporation, together with its subsidiaries, offers sleep solutions and services in the United States. The company designs, manufactures, markets, retails, and services beds, pillows, sheets, and other bedding products under the Sleep Number name. It also provides smart adjustable bases under the FlextFit brand, and smart beds under the Climate 360 name. The company sells its products directly to consumers through retail, online, phone, chat, and other. The company was formerly known as Select Comfort Corporation and changed its name to Sleep Number Corporation in November 2017. Sleep Number Corporation was incorporated in 1987 and is headquartered in Minneapolis, Minnesota.