Bassett Furniture Industries, Inc. – Value Analysis (NASDAQ:BSET) : November 14, 2017

Capitalcube gives Bassett Furniture Industries, Inc. a score of 69.

Our analysis is based on comparing Bassett Furniture Industries, Inc. with the following peers – LaZBoy Incorporated, Ethan Allen Interiors Inc., Flexsteel Industries, Inc., Stanley Furniture Company, Inc. and Hooker Furniture Corporation (LZB-US, ETH-US, FLXS-US, STLY-US and HOFT-US).

Investment Outlook

Bassett Furniture Industries, Inc. has a fundamental score of 69 and has a relative valuation of NEUTRAL.

Fundamental Score

Access our research and ratings on Bassett Furniture Industries, Inc.

Company Overview

  • Considering peers, relative outperformance over the last year and the last month suggest a leading position.
  • It’s current Price/Book of 2.13 is about median in its peer group.
  • The market expects BSET-US to grow faster than its peers and for the company to improve its current ROE.
  • BSET-US‘s relative asset efficiency and net profit margins are both around the median level.
  • Changes in annual revenues (relative to peers) are better than the change in its earnings (relative to peers), implying the company is focused more on revenues.
  • BSET-US‘s return on assets currently and over the past five years is around the peer median and suggest that it does not have any particular operational advantages versus peers.
  • The company’s relatively high gross margin suggests some differentiation with pricing advantages versus peers.
  • Compared with the peers chosen, BSET-US has had faster revenue growth in prior years and a current P/E ratio that suggests faster growth in the future suggesting superior growth expectations.
  • The company’s capital investment seems appropriate for a business with peer median returns.
  • BSET-US has the financial and operating capacity to borrow quickly.

Access our research and ratings on Bassett Furniture Industries, Inc.

Leverage & Liquidity

BSET-US has the financial and operating capacity to borrow quickly.

  • With debt at a relatively low 1.24% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 0.64%), and a well-cushioned interest coverage level of 50.80x, BSET-US can probably borrow quickly. We classify the company as Quick & Able in terms of its capacity to raise additional debt.
  • Of the 5 chosen peers for the company, only 3 of the stocks have an outstanding debt balance. Companies with no debt include FLXS-US and STLY-US.

BSET-US has maintained its Quick & Able profile from the recent year-end.

  • BSET-US‘s interest coverage is greater than (but within one standard deviation of) its five-year average interest coverage of 47.17x.
  • Compared to 2016, interest coverage has remained relatively stable for both the company (50.80x) and the peer median (48.98x).
  • BSET-US‘s debt-EV is its lowest relative to the last five years and compares to a high of 4.57% in 2015.
  • Though its debt-EV decreased to 1.24% from 2.68% (in 2016), its peer median remained relatively stable during this period at 0.64%.
  • Relative to peers, debt-EV fell 1.20 percentage points.

Access the detailed analysis for Bassett Furniture Industries, Inc.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
LaZBoy Incorporated 0.03 2.8 113.67 25682.24
Ethan Allen Interiors Inc. 1.7 1.78 47.15 777.87
Flexsteel Industries, Inc. 0 4.85 No interest exp 999
Stanley Furniture Company, Inc. 0 3.64 -55.13 999
Hooker Furniture Corporation 9.12 4.08 46.98 89.99
Bassett Furniture Industries, Inc. 1.24 2.07 50.8 811.78
Peer Median 0.64 3.22 48.98 905.39
Best In Class 0.03 4.85 No interest exp 25682.24

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Company Profile

Bassett Furniture Industries, Inc. engages in the manufacture and sale of home furnishings. It operates through the following segments: Wholesale, Retail, and Logistical Services. The Wholesale segment focuses on the design, manufacture, sourcing, sale, and distribution of furniture products. The Retail segment consists of company owned stores. The Logistical Services segment offers shipping, delivery, and warehousing services. The company was founded by John David Bassett, Sr. in 1902 and is headquartered in Bassett, VA.

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