Ulta Beauty (NASDAQ:ULTA – Get Free Report) and Arhaus (NASDAQ:ARHS – Get Free Report) are both retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, risk, analyst recommendations and earnings.
Institutional & Insider Ownership
90.4% of Ulta Beauty shares are held by institutional investors. Comparatively, 27.9% of Arhaus shares are held by institutional investors. 0.4% of Ulta Beauty shares are held by insiders. Comparatively, 1.8% of Arhaus shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Analyst Recommendations
This is a breakdown of current ratings for Ulta Beauty and Arhaus, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ulta Beauty | 1 | 12 | 14 | 1 | 2.54 |
| Arhaus | 0 | 14 | 4 | 0 | 2.22 |
Profitability
This table compares Ulta Beauty and Arhaus’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ulta Beauty | 10.31% | 48.78% | 19.55% |
| Arhaus | 5.33% | 20.08% | 5.62% |
Risk & Volatility
Ulta Beauty has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500. Comparatively, Arhaus has a beta of 2.54, meaning that its stock price is 154% more volatile than the S&P 500.
Valuation and Earnings
This table compares Ulta Beauty and Arhaus”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Ulta Beauty | $11.30 billion | 2.25 | $1.20 billion | $26.08 | 21.74 |
| Arhaus | $1.27 billion | 1.17 | $68.55 million | $0.50 | 21.02 |
Ulta Beauty has higher revenue and earnings than Arhaus. Arhaus is trading at a lower price-to-earnings ratio than Ulta Beauty, indicating that it is currently the more affordable of the two stocks.
Summary
Ulta Beauty beats Arhaus on 12 of the 15 factors compared between the two stocks.
About Ulta Beauty
Ulta Beauty, Inc. operates as a specialty beauty retailer in the United States. The company offers branded and private label beauty products, including cosmetics, fragrance, haircare, skincare, bath and body products, professional hair products, and salon styling tools through its Ulta Beauty stores, shop-in-shops, Ulta.com website, and its mobile applications. It also offers beauty services, including hair, makeup, brow, and skin services at its stores. The company was formerly known as ULTA Salon, Cosmetics & Fragrance, Inc. and changed its name to Ulta Beauty, Inc. in January 2017. Ulta Beauty, Inc. was incorporated in 1990 and is based in Bolingbrook, Illinois.
About Arhaus
Arhaus, Inc. operates as a lifestyle brand and premium retailer in the home furnishings market in the United States. It provides merchandise assortments across various categories, including furniture, lighting, textiles, décor, and outdoor. The company's furniture products comprise bedroom, dining room, living room, and home office furnishings, which includes sofas, dining tables and chairs, accent chairs, console and coffee tables, beds, headboards, dressers, desks, bookcases, modular storage, and other items; and outdoor products, such as outdoor dining tables, chairs, chaises and other furniture, lighting, textiles, décor, umbrellas, and fire pits. It offers lighting products, including various distinct and artistic lighting fixtures comprising chandeliers, pendants, table and floor lamps, and sconces; textile products, such as handcrafted indoor and outdoor rugs, bed linens, and pillows and throws; and décor products, including various wall art to mirrors, vases to candles, and other decorative accessories. The company distributes its products through an omni-channel model comprising showrooms, e-commerce platform, print and digital media, and in-home designer services. Arhaus, Inc. was founded in 1986 and is headquartered in Boston Heights, Ohio.
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