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

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

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%

Valuation & Earnings

This table compares Sleep Number and Mohawk Industries”s revenue, earnings per share 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	$10.79 billion	0.78	$369.90 million	$7.55	16.42

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.

Volatility and Risk

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

Institutional & Insider Ownership

85.7% of Sleep Number shares are held by institutional investors. Comparatively, 79.0% of Mohawk Industries shares are held by institutional investors. 3.6% of Sleep Number shares are held by insiders. Comparatively, 17.9% of Mohawk 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.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Sleep Number and Mohawk Industries, as reported 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	4	1	2.29

Sleep Number currently has a consensus price target of $3.50, suggesting a potential upside of 2,700.00%. Mohawk Industries has a consensus price target of $135.00, suggesting a potential upside of 8.90%. Given Sleep Number’s higher possible upside, analysts clearly believe Sleep Number is more favorable than Mohawk Industries.

Summary

Mohawk Industries beats Sleep Number on 12 of the 15 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.