Analyzing Spectrum Brands (NYSE:SPB) & Honest (NASDAQ:HNST)

Honest (NASDAQ:HNST) and Spectrum Brands (NYSE:SPB) are both small-cap consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.

Institutional & Insider Ownership

45.5% of Honest shares are owned by institutional investors. 8.9% of Honest shares are owned by insiders. Comparatively, 3.9% of Spectrum Brands shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations and price targets for Honest and Spectrum Brands, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Honest	2	4	1	0	1.86
Spectrum Brands	0	2	4	0	2.67

Honest presently has a consensus price target of $3.00, suggesting a potential upside of 16.28%. Spectrum Brands has a consensus price target of $77.00, suggesting a potential upside of 19.08%. Given Spectrum Brands’ stronger consensus rating and higher possible upside, analysts clearly believe Spectrum Brands is more favorable than Honest.

Risk and Volatility

Honest has a beta of 2.3, suggesting that its stock price is 130% more volatile than the S&P 500. Comparatively, Spectrum Brands has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500.

Valuation & Earnings

This table compares Honest and Spectrum Brands”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Honest	$378.34 million	0.76	-$6.12 million	$0.06	43.00
Spectrum Brands	$2.81 billion	0.54	$99.70 million	$3.96	16.33

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

Profitability

This table compares Honest and Spectrum Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Honest	1.85%	3.86%	2.82%
Spectrum Brands	3.56%	7.29%	4.00%

Summary

Spectrum Brands beats Honest on 9 of the 14 factors compared between the two stocks.

About Honest

The Honest Company, Inc. manufactures and sells diapers and wipes, skin and personal care, and household and wellness products. The company also offers baby clothing and nursery bedding products. It sells its products through digital and retail sales channels, such as its website and third-party ecommerce sites, as well as brick and mortar retailers. The company was incorporated in 2012 and is headquartered in Los Angeles, California.

About Spectrum Brands

Spectrum Brands Holdings, Inc. operates as a branded consumer products and home essentials company in North America, Europe, the Middle East, Africa, and Asia-Pacific regions. It operates through three segments: Home and Personal Care; Global Pet Care; and Home and Garden. The Home and Personal Care segment provides home appliances under the Black & Decker, Russell Hobbs, George Foreman, PowerXL, Emeril Legasse, Copper Chef, Toastmaster, Juiceman, Farberware, and Breadman brands; and personal care products under the Remington brand. The Global Pet Care segment provides dog and cat chews, treats, wet and dry foods, dog and cat clean-up and food, training, health and grooming, indoor birds, and small animal food and care products under the Good'n'Fun, DreamBone, GOOD BOY, SmartBones, IAMS, EUKANUBA, Nature's Miracle, FURminator, Dingo, 8IN1, Meowee!, and Wild Harvest brands. This segment also offers aquarium kits, stand-alone tanks, and aquatics equipment and consumables under the Tetra, Marineland, Instant Ocean, GloFish, and OmegaSea brands. The Home and Garden segment provides outdoor insect and weed control solutions, and animal repellents under the Spectracide, Garden Safe, Liquid Fence, and EcoLogic brands; household pest control solutions under the Hot Shot, Black Flag, Real-Kill, Ultra Kill, The Ant Trap, and Rid-A-Bug brand names; household surface cleaning, maintenance, and restoration products, including bottled liquids, mops, wipes, and markers under the Rejuvenate brand name; and personal-use pesticides and insect repellent products under the Cutter and Repel brands. The company sells its products through retailers, e-commerce and online retailers, wholesalers, and distributors. Spectrum Brands Holdings, Inc. was founded in 1906 and is headquartered in Middleton, Wisconsin.