Knoll (NYSE: KNL) and Essendant (NASDAQ:ESND) are both small-cap business services companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, valuation, profitability, dividends, risk and institutional ownership.
Insider and Institutional Ownership
96.3% of Knoll shares are held by institutional investors. Comparatively, 94.0% of Essendant shares are held by institutional investors. 1.9% of Knoll shares are held by insiders. Comparatively, 1.6% of Essendant 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.
Earnings & Valuation
This table compares Knoll and Essendant’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Knoll||$1.11 billion||0.80||$142.14 million||$1.45||12.49|
|Essendant||$5.19 billion||0.08||$147.50 million||($4.08)||-2.82|
Essendant has higher revenue and earnings than Knoll. Essendant is trading at a lower price-to-earnings ratio than Knoll, indicating that it is currently the more affordable of the two stocks.
Knoll pays an annual dividend of $0.60 per share and has a dividend yield of 3.3%. Essendant pays an annual dividend of $0.56 per share and has a dividend yield of 4.9%. Knoll pays out 41.4% of its earnings in the form of a dividend. Essendant pays out -13.7% 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. Essendant has raised its dividend for 2 consecutive years. Essendant is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility & Risk
Knoll has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500. Comparatively, Essendant has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500.
This is a breakdown of recent recommendations for Knoll and Essendant, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Knoll presently has a consensus target price of $27.50, indicating a potential upside of 51.85%. Essendant has a consensus target price of $16.50, indicating a potential upside of 43.48%. Given Knoll’s stronger consensus rating and higher possible upside, research analysts clearly believe Knoll is more favorable than Essendant.
This table compares Knoll and Essendant’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Knoll beats Essendant on 11 of the 17 factors compared between the two stocks.
Knoll, Inc. is a manufacturer of commercial and residential furniture, accessories and coverings. The Company operates through three segments: Office, Studio and Coverings. The Office segment includes a range of workplace products that address workplace planning paradigms. These products include systems furniture, seating, storage, tables, desks and KnollExtra accessories, as well as the international sales of its North American Office products. The Studio segment includes KnollStudio products, DatesWeiser, HOLLY HUNT and Knoll Europe. The Coverings segment includes KnollTextiles, Spinneybeck (including Filzfelt), and Edelman Leather. These businesses provide a range of customers with fabrics, felt, leather and related architectural products. KnollStudio products include iconic seating, lounge furniture, side, cafe and dining chairs, as well as conference, training, dining and occasional tables.
Essendant Inc. (Essendant) is a wholesale distributor of workplace items. The Company’s product portfolio includes Janitorial, Foodservice and Breakroom Supplies (JanSan), Technology Products, Traditional Office Products, Industrial Supplies, Cut Sheet Paper Products, Automotive Products and Office Furniture. It operates principally within the United States, with additional operations in Canada and Dubai, the United Arab Emirates (UAE). As of December 31, 2016, the Company provided access to over 22,000 items in these lines: janitorial supplies (cleaners and cleaning accessories), breakroom items (food and beverage products), foodservice consumables (such as disposable cups, plates and utensils), safety and security items, and paper and packaging supplies. As of December 31, 2016, the Company provided access to approximately 11,000 items, including imaging supplies, data storage, digital cameras, computer accessories and computer hardware items, such as printers and other peripherals.
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