Critical Analysis: Mohawk Industries (NYSE:MHK) versus Lifetime Brands (NASDAQ:LCUT)

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

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lifetime Brands	$661.06 million	0.29	-$26.94 million	$1.43	5.89
Mohawk Industries	$11.18 billion	0.76	$369.90 million	$7.55	16.52

Mohawk Industries has higher revenue and earnings than Lifetime Brands. Lifetime Brands 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 recent ratings and price targets for Lifetime Brands and Mohawk Industries, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lifetime Brands	0	3	1	0	2.25
Mohawk Industries	1	11	3	0	2.13

Lifetime Brands currently has a consensus price target of $9.50, suggesting a potential upside of 12.83%. Mohawk Industries has a consensus price target of $133.75, suggesting a potential upside of 7.20%. Given Lifetime Brands’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Lifetime Brands is more favorable than Mohawk Industries.

Profitability

This table compares Lifetime Brands and Mohawk Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lifetime Brands	4.81%	26.39%	9.21%
Mohawk Industries	4.15%	7.50%	4.60%

Institutional and Insider Ownership

40.6% of Lifetime Brands shares are held by institutional investors. Comparatively, 79.0% of Mohawk Industries shares are held by institutional investors. 44.4% of Lifetime Brands shares are held by insiders. Comparatively, 17.9% of Mohawk Industries shares are held by 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.

Volatility & Risk

Lifetime Brands has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500. Comparatively, Mohawk Industries has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500.

Summary

Mohawk Industries beats Lifetime Brands on 8 of the 14 factors compared between the two stocks.

About Lifetime Brands

Lifetime Brands, Inc. designs, sources, and sells branded kitchenware, tableware, and other products for use in the home in the worldwide. The company provides kitchenware products, including kitchen tools and gadgets, cutlery, kitchen scales, thermometers, cutting boards, shears, cookware, pantryware, spice racks, and bakeware; and tableware products comprising dinnerware, stemware, flatware, and giftware. It also provides home solutions, such as thermal beverageware, bath scales, weather and outdoor household, food storage, neoprene travel, and home décor products. The company owns or licenses various brands, including the Farberware, Mikasa, Taylor, KitchenAid, Pfaltzgraff, BUILT NY, Rabbit, Kamenstein, S’well, and Fred & Friends. It serves mass market merchants, specialty stores, department stores, warehouse clubs, grocery stores, off-price retailers, food service distributors, food and beverage outlets, and e-commerce. The company sells its products directly, as well as through its retail websites. Lifetime Brands, Inc. was founded in 1945 and is headquartered in Garden City, New York.

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.