Ethan Allen Interiors (NYSE:ETD) and Home Depot (NYSE:HD) Head-To-Head Review

Ethan Allen Interiors (NYSE:ETD) and Home Depot (NYSE:HD) are both retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, valuation, risk, institutional ownership, analyst recommendations, earnings and profitability.

Analyst Ratings

This is a breakdown of recent ratings for Ethan Allen Interiors and Home Depot, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ethan Allen Interiors	0	2	0	0	2.00
Home Depot	0	7	21	1	2.79

Ethan Allen Interiors currently has a consensus price target of $32.00, suggesting a potential upside of 14.90%. Home Depot has a consensus price target of $426.77, suggesting a potential upside of 16.26%. Given Home Depot’s stronger consensus rating and higher possible upside, analysts clearly believe Home Depot is more favorable than Ethan Allen Interiors.

Volatility and Risk

Ethan Allen Interiors has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500. Comparatively, Home Depot has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500.

Profitability

This table compares Ethan Allen Interiors and Home Depot’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ethan Allen Interiors	9.29%	12.08%	7.83%
Home Depot	8.98%	242.51%	15.45%

Institutional & Insider Ownership

83.8% of Ethan Allen Interiors shares are owned by institutional investors. Comparatively, 70.9% of Home Depot shares are owned by institutional investors. 10.5% of Ethan Allen Interiors shares are owned by company insiders. Comparatively, 0.1% of Home Depot shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

Ethan Allen Interiors pays an annual dividend of $1.56 per share and has a dividend yield of 5.6%. Home Depot pays an annual dividend of $9.20 per share and has a dividend yield of 2.5%. Ethan Allen Interiors pays out 69.3% of its earnings in the form of a dividend. Home Depot pays out 62.4% 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. Ethan Allen Interiors has increased its dividend for 1 consecutive years and Home Depot has increased its dividend for 16 consecutive years.

Earnings & Valuation

This table compares Ethan Allen Interiors and Home Depot”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ethan Allen Interiors	$646.22 million	1.10	$63.82 million	$2.25	12.38
Home Depot	$159.51 billion	2.29	$14.81 billion	$14.74	24.90

Home Depot has higher revenue and earnings than Ethan Allen Interiors. Ethan Allen Interiors is trading at a lower price-to-earnings ratio than Home Depot, indicating that it is currently the more affordable of the two stocks.

Summary

Home Depot beats Ethan Allen Interiors on 13 of the 18 factors compared between the two stocks.

About Ethan Allen Interiors

Ethan Allen Interiors Inc. operates as an interior design company, and manufacturer and retailer of home furnishings in the United States, Mexico, Honduras, and Canada. The company operates in two segments, Wholesale and Retail. Its products include case goods items, such as beds, dressers, armoires, tables, chairs, buffets, entertainment units, home office furniture, and wooden accents; upholstery comprising fabric-covered items, such as sleepers, recliners and other motion furniture, chairs, ottomans, custom pillows, sofas, loveseats, cut fabrics, and leather; and home accent items consisting of window treatments and drapery hardware, wall decors, florals, lighting, clocks, mattresses, bedspreads, throws, pillows, decorative accents, area rugs, wall coverings, and home and garden furnishings. The company markets and sells its products under the Ethan Allen brand through home furnishing retail networks and independent retailers, as well as through ethanallen.com website. It operates a network of design centers. Ethan Allen Interiors Inc. was founded in 1932 and is headquartered in Danbury, Connecticut.

About Home Depot

The Home Depot, Inc. operates as a home improvement retailer in the United States and internationally. It sells various building materials, home improvement products, lawn and garden products, and décor products, as well as facilities maintenance, repair, and operations products. The company also offers installation services for flooring, water heaters, bath, garage doors, cabinets, cabinet makeovers, countertops, sheds, furnaces and central air systems, and windows. In addition, it provides tool and equipment rental services. The company primarily serves homeowners; and professional renovators/remodelers, general contractors, maintenance professionals, handymen, property managers, and building service contractors, as well as specialty tradesmen, such as electricians, plumbers, and painters. It sells its products through websites, including homedepot.com; homedepot.ca and homedepot.com.mx; blinds.com, justblinds.com, and americanblinds.com for custom window coverings; thecompanystore.com, an online site for textiles and décor products; hdsupply.com for maintenance, repair, and operations (MRO) products and related services; and The Home Depot stores. The Home Depot, Inc. was incorporated in 1978 and is headquartered in Atlanta, Georgia.