Bath & Body Works (NYSE:BBWI – Get Free Report) and Sally Beauty (NYSE:SBH – Get Free Report) are both retail/wholesale companies, but which is the superior business? We will compare the two companies based on the strength of their risk, institutional ownership, earnings, profitability, dividends, valuation and analyst recommendations.
Analyst Ratings
This is a summary of current recommendations and price targets for Bath & Body Works and Sally Beauty, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Bath & Body Works | 1 | 6 | 10 | 0 | 2.53 |
| Sally Beauty | 1 | 2 | 3 | 0 | 2.33 |
Bath & Body Works presently has a consensus target price of $43.19, suggesting a potential upside of 15.45%. Sally Beauty has a consensus target price of $13.20, suggesting a potential upside of 26.53%. Given Sally Beauty’s higher probable upside, analysts clearly believe Sally Beauty is more favorable than Bath & Body Works.
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Bath & Body Works | $7.43 billion | 1.09 | $878.00 million | $4.10 | 9.12 |
| Sally Beauty | $3.72 billion | 0.29 | $153.41 million | $1.44 | 7.24 |
Bath & Body Works has higher revenue and earnings than Sally Beauty. Sally Beauty is trading at a lower price-to-earnings ratio than Bath & Body Works, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
95.1% of Bath & Body Works shares are owned by institutional investors. 0.3% of Bath & Body Works shares are owned by insiders. Comparatively, 1.6% of Sally Beauty shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Profitability
This table compares Bath & Body Works and Sally Beauty’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Bath & Body Works | 12.43% | -44.03% | 14.45% |
| Sally Beauty | 4.13% | 31.37% | 6.56% |
Risk & Volatility
Bath & Body Works has a beta of 1.83, suggesting that its share price is 83% more volatile than the S&P 500. Comparatively, Sally Beauty has a beta of 1.55, suggesting that its share price is 55% more volatile than the S&P 500.
Summary
Bath & Body Works beats Sally Beauty on 11 of the 14 factors compared between the two stocks.
About Bath & Body Works
Bath & Body Works, Inc. is a specialty retailers and home to America’s Favorite Fragrances, offering a breadth of exclusive fragrances for the body and home, including the selling collections for fine fragrance mist, body lotion and body cream, 3-wick candles, home fragrance diffusers and liquid hand soap. The company was founded by Leslie Herbert Wexner in 1963 and is headquartered in Columbus, OH.
About Sally Beauty
Sally Beauty Holdings, Inc. operates as a specialty retailer and distributor of professional beauty supplies. The company operates through two segments, Sally Beauty Supply and Beauty Systems Group. The Sally Beauty Supply segment offers beauty products, including hair color and care products, skin and nail care products, styling tools, and other beauty products for retail customers, salons, and salon professionals. This segment also provides products under Wella and L'Oreal brands. The Beauty Systems Group segment offers professional beauty products, such as hair color and care products, skin and nail care products, styling tools, and other beauty items directly to salons and salon professionals through its professional-only stores, e-commerce platforms, and sales force, as well as through franchised stores under the Armstrong McCall store name. This segment also sells products under Paul Mitchell and Wella brands. It operates stores and franchised units in the United States, Puerto Rico, Canada, Mexico, Chile, Peru, the United Kingdom, Ireland, Belgium, France, the Netherlands, Spain, and Germany. The company distributes its products through full-service/exclusive distributors and open-line distributors. Sally Beauty Holdings, Inc. was founded in 1964 and is headquartered in Denton, Texas.
Receive News & Ratings for Bath & Body Works Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Bath & Body Works and related companies with MarketBeat.com's FREE daily email newsletter.
