Contrasting Mohawk Industries (NYSE:MHK) and Sleep Number (NASDAQ:SNBR)

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

Profitability

This table compares Sleep Number and Mohawk Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sleep Number	-12.98%	N/A	-16.48%
Mohawk Industries	4.15%	7.50%	4.60%

Volatility & Risk

Sleep Number has a beta of 2.49, suggesting that its share price is 149% more volatile than the S&P 500. Comparatively, Mohawk Industries has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500.

Institutional & Insider Ownership

85.7% of Sleep Number shares are owned by institutional investors. Comparatively, 79.0% of Mohawk Industries shares are owned by institutional investors. 3.6% of Sleep Number shares are owned by insiders. Comparatively, 17.9% of Mohawk Industries shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Sleep Number and Mohawk Industries”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sleep Number	$1.34 billion	0.00	-$131.96 million	($7.56)	-0.02
Mohawk Industries	$11.18 billion	0.71	$369.90 million	$7.55	15.62

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

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Sleep Number and Mohawk Industries, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sleep Number	2	2	0	0	1.50
Mohawk Industries	1	11	3	0	2.13

Sleep Number presently has a consensus target price of $3.50, indicating a potential upside of 2,700.00%. Mohawk Industries has a consensus target price of $133.75, indicating a potential upside of 13.39%. Given Sleep Number’s higher possible upside, analysts plainly believe Sleep Number is more favorable than Mohawk Industries.

Summary

Mohawk Industries beats Sleep Number on 11 of the 14 factors compared between the two stocks.

About Sleep Number

Sleep Number Corporation, together with its subsidiaries, offers sleep solutions and services in the United States. The company designs, manufactures, markets, retails, and services beds, pillows, sheets, and other bedding products under the Sleep Number name. It also provides smart adjustable bases under the FlextFit brand, and smart beds under the Climate 360 name. The company sells its products directly to consumers through retail, online, phone, chat, and other. The company was formerly known as Select Comfort Corporation and changed its name to Sleep Number Corporation in November 2017. Sleep Number Corporation was incorporated in 1987 and is headquartered in Minneapolis, Minnesota.

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.