Critical Analysis: Wesfarmers (OTCMKTS:WFAFY) and Tile Shop (NASDAQ:TTSH)

Wesfarmers (OTCMKTS:WFAFY) and Tile Shop (NASDAQ:TTSH) are both consumer cyclical companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, analyst recommendations, risk, institutional ownership, dividends, valuation and earnings.

Insider & Institutional Ownership

0.0% of Wesfarmers shares are held by institutional investors. Comparatively, 36.7% of Tile Shop shares are held by institutional investors. 36.6% of Tile Shop shares are held by 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.

Profitability

This table compares Wesfarmers and Tile Shop’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wesfarmers	N/A	N/A	N/A
Tile Shop	1.50%	4.47%	1.67%

Analyst Recommendations

This is a breakdown of current ratings and price targets for Wesfarmers and Tile Shop, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wesfarmers	0	0	0	0	N/A
Tile Shop	0	0	0	0	N/A

Earnings and Valuation

This table compares Wesfarmers and Tile Shop”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wesfarmers	N/A	N/A	N/A	$1.19	19.72
Tile Shop	$359.68 million	0.82	$10.07 million	$0.21	31.52

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

Summary

Tile Shop beats Wesfarmers on 7 of the 8 factors compared between the two stocks.

About Wesfarmers

Wesfarmers Limited engages in the retail business in Australia, New Zealand, and internationally. The company is involved in the retail sale of building materials, home and garden improvement, lifestyle, and outdoor living products; apparel and general merchandise, including toys, leisure, entertainment, home, and consumables; and office products and solutions, such as stationery, technology, furniture, art supplies, and learning and development resources, as well as print and create, and technical support services through its Officeworks stores. It also provides hardware and software repairs, system security solutions, wireless and wired networking services, virus and spyware prevention and removal, and data backup and recovery solutions. In addition, the company manufactures and supplies ammonia, ammonium nitrate, and industrial chemicals; manufactures, imports, and distributes phosphate, nitrogen, and potassium-based fertilizers; supplies polyvinyl chloride resins; produces wood-plastic composite products; and manufactures and distributes sodium cyanide. Further, it produces and distributes liquefied petroleum gas and liquefied natural gas; supplies and distributes maintenance, repair, operating products, and industrial safety products and services; manufactures and markets industrial, medical, and specialty gases and equipment; supplies tools, safety gear, personal protective equipment, electricals, work wear, and industrial supplies; and provides risk management and compliance services, as well as footwear; safety products, uniforms, engineering supplies, and packaging services; and engages in other businesses. Additionally, the company provides health, beauty, and wellbeing products and services; clinical cosmetic and skin care treatments; retail support services; distributes pharmaceutical goods; and operates online marketplace and data sharing platform. Wesfarmers Limited was founded in 1914 and is headquartered in Perth, Australia.

About Tile Shop

Tile Shop Holdings, Inc. operates as a specialty retailer of natural stone and man-made tiles, setting and maintenance materials, and related accessories in the United States. The company offers natural stone products, including marble, travertine, granite, quartz, sandstone, slate, and onyx tiles; and man-made products, comprises ceramic, porcelain, glass, cement, wood look, and metal and luxury vinyl tile. It also manufactures setting and maintenance materials, such as thinset, grout, and sealers; and accessories which includes installation tools, shower and bath shelves, drains, and related products. In addition, the company offers customers delivery service through third-party freight providers. It sells its products under the Superior Adhesives & Chemicals, Superior Tools & Supplies, Rush River, and Fired Earth brands. Tile Shop Holdings, Inc. was founded in 1985 and is headquartered in Plymouth, Minnesota.