Head-To-Head Analysis: Toll Brothers (NYSE:TOL) and Bassett Furniture Industries (NASDAQ:BSET)

Toll Brothers (NYSE:TOL) and Bassett Furniture Industries (NASDAQ:BSET) are both consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their dividends, institutional ownership, profitability, earnings, analyst recommendations, valuation and risk.

Institutional and Insider Ownership

91.8% of Toll Brothers shares are held by institutional investors. Comparatively, 54.4% of Bassett Furniture Industries shares are held by institutional investors. 1.4% of Toll Brothers shares are held by insiders. Comparatively, 7.3% of Bassett Furniture Industries shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Toll Brothers and Bassett Furniture Industries”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Toll Brothers	$10.97 billion	1.17	$1.35 billion	$12.46	11.22
Bassett Furniture Industries	$335.28 million	0.57	$6.10 million	$0.79	28.01

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

Profitability

This table compares Toll Brothers and Bassett Furniture Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Toll Brothers	11.14%	14.21%	8.24%
Bassett Furniture Industries	2.02%	4.36%	2.26%

Risk and Volatility

Toll Brothers has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500. Comparatively, Bassett Furniture Industries has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500.

Dividends

Toll Brothers pays an annual dividend of $1.04 per share and has a dividend yield of 0.7%. Bassett Furniture Industries pays an annual dividend of $0.80 per share and has a dividend yield of 3.6%. Toll Brothers pays out 8.3% of its earnings in the form of a dividend. Bassett Furniture Industries pays out 101.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Toll Brothers has raised its dividend for 5 consecutive years and Bassett Furniture Industries has raised its dividend for 4 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Toll Brothers and Bassett Furniture Industries, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Toll Brothers	1	4	14	1	2.75
Bassett Furniture Industries	0	2	0	1	2.67

Toll Brothers presently has a consensus price target of $166.67, suggesting a potential upside of 19.22%. Given Toll Brothers’ stronger consensus rating and higher probable upside, equities analysts clearly believe Toll Brothers is more favorable than Bassett Furniture Industries.

Summary

Toll Brothers beats Bassett Furniture Industries on 14 of the 17 factors compared between the two stocks.

About Toll Brothers

Toll Brothers, Inc., together with its subsidiaries, designs, builds, markets, sells, and arranges finance for a range of detached and attached homes in luxury residential communities in the United States. It designs, builds, markets, and sells condominiums through Toll Brothers City Living. The company also develops a range of single-story living and first-floor primary bedroom suite home designs, as well as communities with recreational amenities, such as golf courses, marinas, pool complexes, country clubs, and fitness and recreation centers; and develops, operates, and rents apartments. In addition, it provides various interior fit-out options, such as flooring, wall tile, plumbing, cabinets, fixtures, appliances, lighting, and home-automation and security technologies. Further, the company owns and operates architectural, engineering, mortgage, title, land development, insurance, smart home technology, landscaping, lumber distribution, house component assembly, and component manufacturing operations. It serves luxury first-time, move-up, empty-nester, active-adult, and second-home buyers. Toll Brothers, Inc. was founded in 1967 and is headquartered in Fort Washington, Pennsylvania.

About Bassett Furniture Industries

Bassett Furniture Industries, Incorporated, together with its subsidiaries, manufactures, markets, and retails home furnishings in the United States and internationally. It operates in three segments: Wholesale, Retail Company-Owned Stores, and Corporate and Other. The company engages in the design, manufacture, sourcing, sale, and distribution of furniture products, including dining, bedroom and bedding, home decorations, rugs, and outdoor furniture to a network of company-owned retail stores, licensee-owned stores, and independent retailers. The company also distributes its products through multi-line furniture stores, including Bassett galleries or design centers, as well as sells online; and engages in wood and upholstery operations. In addition, it owns and leases land, retail store properties, warehouses, and distribution centers. Bassett Furniture Industries, Incorporated was founded in 1902 and is based in Bassett, Virginia.