Electronic Arts (NASDAQ:EA) and Mohawk Industries (NYSE:MHK) are both large-cap consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, profitability, institutional ownership, earnings and valuation.
Earnings and Valuation
This table compares Electronic Arts and Mohawk Industries' gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Electronic Arts | $5.54 billion | 7.17 | $3.04 billion | $4.76 | 29.00 |
Mohawk Industries | $9.97 billion | 1.30 | $744.21 million | $10.04 | 18.14 |
Electronic Arts has higher earnings, but lower revenue than Mohawk Industries. Mohawk Industries is trading at a lower price-to-earnings ratio than Electronic Arts, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Electronic Arts has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500. Comparatively, Mohawk Industries has a beta of 1.54, indicating that its share price is 54% more volatile than the S&P 500.
Profitability
This table compares Electronic Arts and Mohawk Industries' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Electronic Arts | 23.51% | 17.85% | 12.11% |
Mohawk Industries | 5.70% | 6.74% | 4.02% |
Institutional & Insider Ownership
88.0% of Electronic Arts shares are owned by institutional investors. Comparatively, 74.0% of Mohawk Industries shares are owned by institutional investors. 0.9% of Electronic Arts shares are owned by company insiders. Comparatively, 18.5% of Mohawk Industries shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Analyst Recommendations
This is a summary of recent ratings and price targets for Electronic Arts and Mohawk Industries, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Electronic Arts | 0 | 12 | 14 | 1 | 2.59 |
Mohawk Industries | 2 | 6 | 9 | 1 | 2.50 |
Electronic Arts currently has a consensus price target of $153.3448, indicating a potential upside of 11.21%. Mohawk Industries has a consensus price target of $136.3158, indicating a potential downside of 25.34%. Given Electronic Arts' stronger consensus rating and higher possible upside, equities research analysts plainly believe Electronic Arts is more favorable than Mohawk Industries.
Summary
Electronic Arts beats Mohawk Industries on 10 of the 14 factors compared between the two stocks.