Knoll (NYSE: KNL) and RealD (NYSE:RLD) are both small-cap business services companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, earnings and institutional ownership.

Insider & Institutional Ownership

90.7% of Knoll shares are held by institutional investors. 1.9% of Knoll 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.

Analyst Ratings

This is a summary of recent recommendations and price targets for Knoll and RealD, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Knoll 0 1 2 0 2.67
RealD 0 0 0 0 N/A

Knoll currently has a consensus target price of $27.50, suggesting a potential upside of 54.84%. Given Knoll’s higher probable upside, equities research analysts plainly believe Knoll is more favorable than RealD.

Dividends

Knoll pays an annual dividend of $0.60 per share and has a dividend yield of 3.4%. RealD does not pay a dividend. Knoll pays out 41.4% of its earnings in the form of a dividend. RealD has increased its dividend for 2 consecutive years.

Profitability

This table compares Knoll and RealD’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Knoll 6.43% 23.40% 8.49%
RealD -8.50% -11.24% -6.77%

Earnings & Valuation

This table compares Knoll and RealD’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Knoll $1.11 billion 0.79 $142.14 million $1.45 12.25
RealD N/A N/A N/A N/A N/A

Knoll has higher revenue and earnings than RealD.

Summary

Knoll beats RealD on 9 of the 11 factors compared between the two stocks.

About Knoll

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.

About RealD

RealD Inc. (RealD) is a licensor of three dimensional (3D) and other visual technologies. The Company’s property portfolio is used in applications that enable a viewing experience in the theater, the home and elsewhere. The Company licenses its RealD Cinema Systems to motion picture exhibitors that show 3D motion pictures and alternative 3D content. The Company operates in three segments: cinema, consumer electronics and professional. It also provides certain of its technologies to consumer electronics manufacturers and content distributors. It licenses 3D technologies for use in professional and other non-theatrical applications. The Company’s visual technology is used in different applications and businesses, including entertainment, consumer electronics, education, aerospace, defense and healthcare. As of March 31, 2015, the Company’s RealD Cinema Systems were deployed on approximately 26,700 theater screens in 70 countries.

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