Head-To-Head Review: Mohawk Industries (NYSE:MHK) & Culp (NYSE:CULP)

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

Institutional & Insider Ownership

79.0% of Mohawk Industries shares are held by institutional investors. Comparatively, 75.1% of Culp shares are held by institutional investors. 17.4% of Mohawk Industries shares are held by company insiders. Comparatively, 7.3% of Culp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Mohawk Industries	4.54%	7.68%	4.50%
Culp	-8.96%	-18.18%	-8.93%

Volatility and Risk

Mohawk Industries has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500. Comparatively, Culp has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Mohawk Industries and Culp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mohawk Industries	0	6	7	2	2.73
Culp	0	0	0	0	0.00

Mohawk Industries presently has a consensus target price of $140.71, indicating a potential upside of 30.42%. Given Mohawk Industries’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Mohawk Industries is more favorable than Culp.

Valuation and Earnings

This table compares Mohawk Industries and Culp”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	$10.84 billion	0.62	$517.70 million	$7.64	14.12
Culp	$213.24 million	0.27	-$19.10 million	($1.53)	-3.02

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

Summary

Mohawk Industries beats Culp on 15 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 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.