Comparing Sally Beauty Holdings (SBH) & Staples (SPLS)
Sally Beauty Holdings (NYSE: SBH) and Staples (NASDAQ:SPLS) are both mid-cap retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, analyst recommendations, profitability, dividends, institutional ownership and risk.
Institutional and Insider Ownership
85.6% of Staples shares are owned by institutional investors. 1.0% of Sally Beauty Holdings shares are owned by insiders. Comparatively, 0.7% of Staples 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.
Volatility and Risk
Sally Beauty Holdings has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500. Comparatively, Staples has a beta of 1.74, meaning that its stock price is 74% more volatile than the S&P 500.
This table compares Sally Beauty Holdings and Staples’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Sally Beauty Holdings||5.89%||-80.60%||11.83%|
Valuation and Earnings
This table compares Sally Beauty Holdings and Staples’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Sally Beauty Holdings||$3.94 billion||0.60||$603.02 million||$1.64||10.91|
|Staples||$17.91 billion||0.38||$1.22 billion||($2.35)||-4.36|
Staples has higher revenue and earnings than Sally Beauty Holdings. Staples is trading at a lower price-to-earnings ratio than Sally Beauty Holdings, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings for Sally Beauty Holdings and Staples, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Sally Beauty Holdings||1||7||3||0||2.18|
Sally Beauty Holdings presently has a consensus price target of $23.88, indicating a potential upside of 33.38%. Staples has a consensus price target of $8.85, indicating a potential downside of 13.66%. Given Sally Beauty Holdings’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Sally Beauty Holdings is more favorable than Staples.
Staples pays an annual dividend of $0.48 per share and has a dividend yield of 4.7%. Sally Beauty Holdings does not pay a dividend. Staples pays out -20.4% of its earnings in the form of a dividend.
Sally Beauty Holdings beats Staples on 8 of the 15 factors compared between the two stocks.
Sally Beauty Holdings Company Profile
Sally Beauty Holdings, Inc. is an international specialty retailer and distributor of professional beauty supplies with operations primarily in North America, South America and Europe. The Company operates through two business segments: Sally Beauty Supply and Beauty Systems Group (BSG). Sally Beauty Supply is a domestic and international chain of cash and carry retail stores, which offers professional beauty supplies to both salon professionals and retail customers primarily in North America, Puerto Rico, and parts of Europe and South America. BSG, including its franchise-based business Armstrong McCall, is a full service beauty supply distributor, which offers professional brands of beauty products directly to salons and salon professionals through its own sales force and professional-only stores (including franchise stores) in partially exclusive geographical territories in North America and parts of Europe.
Staples Company Profile
Staples, Inc. (Staples) is a provider of products and services that serve the needs of business customers and consumers. The Company offers a range of print and marketing and technology services. The Company’s segments include North American Delivery, North American Retail and Other. The North American Delivery segment consists of the United States and Canadian businesses, including Staples Business Advantage, staples.com, staples.ca, and quill.com, that sell and deliver products and services primarily to businesses. The North American Retail segment includes its retail stores in the United States and Canada. As of January 28, 2017, its North American Retail segment consisted of 1,255 stores in the United States and 304 stores in Canada. The Company has other businesses in Australia, South America and Asia. Staples Australia serves primarily contract and government customers in Australia and New Zealand. The Company also has operations in China, Argentina, Taiwan and Brazil.
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