Contrasting Crown Crafts (CRWS) & Culp (CULP)

Crown Crafts (NASDAQ: CRWS) and Culp (NYSE:CULP) are both small-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, earnings, valuation and analyst recommendations.

Earnings & Valuation

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This table compares Crown Crafts and Culp’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Crown Crafts $65.98 million 0.88 $5.57 million $0.55 10.45
Culp $309.54 million 1.25 $22.33 million $1.99 15.63

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

Insider and Institutional Ownership

42.3% of Crown Crafts shares are held by institutional investors. Comparatively, 86.9% of Culp shares are held by institutional investors. 14.2% of Crown Crafts shares are held by company insiders. Comparatively, 11.4% of Culp shares are held 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.

Analyst Ratings

This is a breakdown of current ratings for Crown Crafts and Culp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Crown Crafts 0 0 3 0 3.00
Culp 0 0 0 0 N/A

Crown Crafts currently has a consensus target price of $8.00, indicating a potential upside of 39.13%. Given Crown Crafts’ higher probable upside, equities analysts plainly believe Crown Crafts is more favorable than Culp.

Volatility & Risk

Crown Crafts has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500. Comparatively, Culp has a beta of 0.16, indicating that its stock price is 84% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Crown Crafts 5.21% 10.60% 8.26%
Culp 4.46% 13.46% 9.77%

Dividends

Crown Crafts pays an annual dividend of $0.32 per share and has a dividend yield of 5.6%. Culp pays an annual dividend of $0.36 per share and has a dividend yield of 1.2%. Crown Crafts pays out 58.2% of its earnings in the form of a dividend. Culp pays out 18.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Summary

Culp beats Crown Crafts on 9 of the 15 factors compared between the two stocks.

About Crown Crafts

Crown Crafts, Inc. operates indirectly through its subsidiaries, Crown Crafts Infant Products, Inc., Hamco, Inc. and Carousel Designs, LLC, in the infant and toddler products segment within the consumer products industry. The Company operates though the segment of infant and toddler products. These products consist of infant and toddler bedding, bibs, soft bath products, disposable products and accessories. Its focus is on infant, toddler and juvenile products, including crib; blankets and swaddle blankets; nursery and toddler accessories; room decor; reusable and disposable bibs; hooded bath towels and washcloths; reusable and disposable placemats and floor mats; disposable cup labels, toilet seat covers and changing mats, and other infant, toddler and juvenile soft goods. Sales of its products are made directly to retailers, which are mass merchants, juvenile specialty stores, value channel stores, grocery and drug stores, restaurants, Internet accounts and wholesale clubs.

About Culp

Culp, Inc. manufacturers, sources, markets, and sells mattress fabrics, sewn covers, and cut and sewn kits for use in mattresses, foundations, and other bedding products in North America, the Far East, Asia, and internationally. It operates through 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 bed components. The Upholstery Fabrics segment provides jacquard woven fabrics, velvets, microdenier 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, sofa-beds, chairs, loveseats, recliners, sectionals, office seating, and other institutional settings, as well as for use in fabrics markets. Culp, Inc. was founded in 1972 and is headquartered in High Point, North Carolina.

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