Steelcase (NYSE: SCS) and Knoll (NYSE:KNL) are both small-cap business services companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitabiliy, dividends, earnings and risk.
Valuation & Earnings
This table compares Steelcase and Knoll’s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Steelcase | $3.05 billion | 0.39 | $261.10 million | $1.01 | 13.32 |
| Knoll | $1.11 billion | 0.81 | $141.65 million | $1.45 | 12.79 |
Steelcase has higher revenue and earnings than Knoll. Knoll is trading at a lower price-to-earnings ratio than Steelcase, indicating that it is currently the more affordable of the two stocks.
Dividends
Steelcase pays an annual dividend of $0.51 per share and has a dividend yield of 3.8%. Knoll pays an annual dividend of $0.60 per share and has a dividend yield of 3.2%. Steelcase pays out 50.5% of its earnings in the form of a dividend. Knoll pays out 41.4% 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. Steelcase has increased its dividend for 6 consecutive years and Knoll has increased its dividend for 2 consecutive years. Steelcase is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility & Risk
Steelcase has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500. Comparatively, Knoll has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for Steelcase and Knoll, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Steelcase | 0 | 1 | 1 | 0 | 2.50 |
| Knoll | 0 | 1 | 1 | 0 | 2.50 |
Steelcase currently has a consensus target price of $16.00, indicating a potential upside of 18.96%. Knoll has a consensus target price of $27.00, indicating a potential upside of 45.63%. Given Knoll’s higher probable upside, analysts clearly believe Knoll is more favorable than Steelcase.
Insider and Institutional Ownership
65.0% of Steelcase shares are held by institutional investors. Comparatively, 98.2% of Knoll shares are held by institutional investors. 18.9% of Steelcase shares are held by company insiders. Comparatively, 1.9% of Knoll shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Profitability
This table compares Steelcase and Knoll’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Steelcase | 4.04% | 16.37% | 7.17% |
| Knoll | 6.43% | 23.64% | 8.51% |
Summary
Knoll beats Steelcase on 8 of the 15 factors compared between the two stocks.
Steelcase Company Profile
Steelcase Inc. provides an integrated portfolio of furniture settings, user-centered technologies and interior architectural products. The Company’s segments include Americas, EMEA and Other Category. The Company’s furniture portfolio includes panel-based and freestanding furniture systems and complementary products, such as storage, tables and ergonomic worktools. Its seating products include task chairs, which are ergonomic seating that can be used in collaborative or casual settings and specialty seating for specific vertical markets, such as healthcare and education. Its technology solutions support group collaboration by integrating furniture and technology. Its interior architectural products include full and partial height walls and doors. It also offers services, which include workplace strategy consulting, lease origination services, furniture and asset management and hosted spaces. Its family of brands includes Steelcase, Coalesse, Designtex, PolyVision and Turnstone.
Knoll Company Profile
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.
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