Analyzing Culp (NYSE:CULP) & Tapestry (NYSE:TPR)

Culp (NYSE:CULP – Get Free Report) and Tapestry (NYSE:TPR – Get Free Report) are both consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their valuation, risk, earnings, dividends, institutional ownership, profitability and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and price targets for Culp and Tapestry, as provided by MarketBeat.

Tapestry has a consensus price target of $171.56, indicating a potential upside of 46.02%. Given Tapestry’s stronger consensus rating and higher probable upside, analysts clearly believe Tapestry is more favorable than Culp.

Valuation & Earnings

This table compares Culp and Tapestry”s top-line revenue, earnings per share (EPS) and valuation.

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

Institutional & Insider Ownership

75.1% of Culp shares are owned by institutional investors. Comparatively, 90.8% of Tapestry shares are owned by institutional investors. 7.9% of Culp shares are owned by company insiders. Comparatively, 1.3% of Tapestry shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

Culp pays an annual dividend of $0.46 per share and has a dividend yield of 12.0%. Tapestry pays an annual dividend of $1.85 per share and has a dividend yield of 1.6%. Culp pays out -143.8% of its earnings in the form of a dividend. Tapestry pays out 25.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Tapestry has raised its dividend for 3 consecutive years. Culp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Culp has a beta of 1.21, meaning that its share price is 21% more volatile than the S&P 500. Comparatively, Tapestry has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500.

Profitability

This table compares Culp and Tapestry’s net margins, return on equity and return on assets.

Summary

Tapestry beats Culp on 15 of the 18 factors compared between the two stocks.

About Culp

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Culp, Inc. manufactures, sources, markets, and sells mattress fabrics, sewn covers, and cut and sewn kits for use in mattresses, foundations, and other bedding products in the United States, North America, the Far East, Asia, and internationally. It operates in two segments, Mattress Fabrics and Upholstery Fabrics. The Mattress Fabrics segment offers woven jacquard, knitted, and converted fabrics for use in the production of bedding products, including mattresses, box springs, foundations, and top of bed components. The Upholstery Fabrics segment provides jacquard woven fabrics, velvets, micro denier suedes, woven dobbies, knitted fabrics, piece-dyed woven products, and polyurethane fabrics for use in the production of residential and commercial upholstered furniture, such as sofas, recliners, loveseats, chairs, sectionals, and sofa-beds, as well as office seating and window treatment products; and installation services for customers in the hospitality and commercial industries. Culp, Inc. was incorporated in 1972 and is headquartered in High Point, North Carolina.

About Tapestry

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Tapestry, Inc. provides luxury accessories and branded lifestyle products in the United States, Japan, Greater China, and internationally. The company operates in three segments: Coach, Kate Spade, and Stuart Weitzman. It offers women’s handbags; and women’s accessories, such as small leather goods which includes mini and micro handbags, money pieces, wristlets, pouches, and cosmetic cases, as well as novelty accessories including address books, time management and travel accessories, sketchbooks, and portfolios; and belts, key rings, and charms. The company also provides men products, which includes bag collections, such as business cases, computer bags, messenger-style bags, backpacks, and totes; small leather goods including wallets, card cases, travel organizers, and belts; and footwear, watches, fragrances, sunglasses, novelty accessories, and ready-to-wear items. In addition, it offers other products including women’s footwear and fragrances; eyewear and sunglasses; and jewelry, such as bracelets, necklaces, rings, and earrings, watches, and other women’s seasonal lifestyle apparel collections, including outerwear, ready-to-wear and cold weather accessories, such as gloves, scarves, and hats. Further, the company provides kids items, housewares, and home accessories, such as fashion bedding and tableware, stationery, and gifts. It offers its products through e-commerce sites and concession shop-in-shops, wholesale, and third-party distributors under the Coach, Kate Spade, and Stuart Weitzman brand names. The company was formerly known as Coach, Inc. and changed its name to Tapestry, Inc. in October 2017. Tapestry, Inc. was founded in 1941 and is headquartered in New York, New York.