Virco Manufacturing (NASDAQ:VIRC) vs. MasterBrand (NYSE:MBC) Critical Review

Virco Manufacturing (NASDAQ:VIRC) and MasterBrand (NYSE:MBC) are both small-cap consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, dividends, valuation and profitability.

Volatility and Risk

Virco Manufacturing has a beta of 0.37, suggesting that its stock price is 63% less volatile than the S&P 500. Comparatively, MasterBrand has a beta of 1.42, suggesting that its stock price is 42% more volatile than the S&P 500.

Profitability

This table compares Virco Manufacturing and MasterBrand’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Virco Manufacturing	7.99%	17.61%	9.63%
MasterBrand	3.37%	11.88%	5.28%

Earnings and Valuation

This table compares Virco Manufacturing and MasterBrand”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Virco Manufacturing	$266.24 million	0.49	$21.64 million	$1.26	6.55
MasterBrand	$2.70 billion	0.60	$125.90 million	$0.72	17.67

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Virco Manufacturing and MasterBrand, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Virco Manufacturing	0	0	1	0	3.00
MasterBrand	1	0	1	0	2.00

Virco Manufacturing currently has a consensus target price of $17.00, suggesting a potential upside of 106.06%. MasterBrand has a consensus target price of $15.00, suggesting a potential upside of 17.88%. Given Virco Manufacturing’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Virco Manufacturing is more favorable than MasterBrand.

Institutional & Insider Ownership

31.0% of Virco Manufacturing shares are held by institutional investors. Comparatively, 87.3% of MasterBrand shares are held by institutional investors. 18.1% of Virco Manufacturing shares are held by company insiders. Comparatively, 2.0% of MasterBrand shares are held 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.

Summary

Virco Manufacturing beats MasterBrand on 7 of the 13 factors compared between the two stocks.

About Virco Manufacturing

Virco Mfg. Corporation engages in the design, production, and distribution of furniture in the United States and Canada. The company offers seating products, including 4-leg chairs, cantilever chairs, mobile task chairs and lab stools, tablet armchairs, steel-frame and floor rockers, series stools, hard plastic seating, folding and upholstered stack chairs, and plastic stack and upholstered ergonomic chairs. It also provides activity, butcher block, folding, office, technology, and mobile tables; desks and workstations, and instructor media stations and towers; chair desks and combo units, tablet arm and caster units, mobile workstations, student desks, and returns and credenzas; and computer furniture solutions. In addition, the company provides administrative office furniture, including desks, returns, bookcases, and other items, as well as steel storage cabinets, wardrobe tower cabinets, file credenzas, and mobile pedestals; laboratory furniture comprising steel-based science tables, table bases, lab stools, and wood-frame science tables; mobile furniture, such as mobile tables, mobile cabinets, and mobile chairs for school settings and offices; and handling and storage equipment, and stackable storage trucks. It serves public and private educational institutions, charter schools, convention centers and arenas, hospitality providers, government facilities, and places of worship through its sales and support teams, and dealers' network. Virco Mfg. Corporation was incorporated in 1950 and is headquartered in Torrance, California.

About MasterBrand

MasterBrand, Inc. engages in the manufacture and sale of residential cabinets in the United States and Canada. The company offers a range of residential cabinetry products for the kitchen, bathroom, and other parts of the home. It sells its products to remodeling and new construction markets through dealers, retailers, and builders. The company was formerly known as United Cabinet Incorporated. MasterBrand, Inc. was founded in 1954 and is headquartered in Beachwood, Ohio.