Critical Survey: WD-40 (NASDAQ:WDFC) and RH (NYSE:RH)

WD-40 (NASDAQ:WDFC) and RH (NYSE:RH) are both mid-cap consumer staples companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, institutional ownership and profitability.

Valuation and Earnings

This table compares WD-40 and RH”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WD-40	$619.98 million	4.48	$90.99 million	$5.88	35.09
RH	$3.44 billion	0.71	$124.79 million	$6.31	20.43

RH has higher revenue and earnings than WD-40. RH is trading at a lower price-to-earnings ratio than WD-40, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares WD-40 and RH’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WD-40	12.57%	30.23%	17.15%
RH	3.63%	-567.82%	2.62%

Volatility and Risk

WD-40 has a beta of 0.33, indicating that its stock price is 67% less volatile than the S&P 500. Comparatively, RH has a beta of 1.89, indicating that its stock price is 89% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for WD-40 and RH, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WD-40	0	1	2	0	2.67
RH	5	8	7	0	2.10

WD-40 currently has a consensus price target of $270.00, suggesting a potential upside of 30.86%. RH has a consensus price target of $176.47, suggesting a potential upside of 36.86%. Given RH’s higher probable upside, analysts plainly believe RH is more favorable than WD-40.

Insider and Institutional Ownership

91.5% of WD-40 shares are held by institutional investors. Comparatively, 90.2% of RH shares are held by institutional investors. 0.8% of WD-40 shares are held by company insiders. Comparatively, 27.0% of RH shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

About WD-40

WD-40 Company develops and sells maintenance products, and homecare and cleaning products in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company provides multi-purpose maintenance products that include aerosol sprays, non-aerosol trigger sprays, precision pens, and in liquid-bulk form products under the WD-40 Multi-Use brand name; specialty maintenance products, such as penetrants, degreasers, corrosion inhibitors, greases, lubricants, and rust removers under the WD-40 Specialist brand; and bike-specific products. It also offers multi-purpose and specialty drip oils, and spray lubricant products, as well as other specialty maintenance products under the 3-IN-ONE brand name; and professional spray maintenance products and lubricants for the bike maintenance market under the GT85 brand name. In addition, the company provides automatic toilet bowl cleaners under the 2000 Flushes brand name; aerosol and liquid trigger carpet stain and odor eliminators under the Spot Shot brand; room and rug deodorizers under the Carpet Fresh brand name; carpet and household cleaners, and rug and room deodorizers under the 1001 brand; heavy-duty hand cleaner products under the Lava brand name in the United States, as well as under the Solvol brand name in Australia; and automatic toilet bowl cleaners under the X-14 brand name. It sells its products primarily through warehouse club stores, hardware stores, automotive parts outlets, industrial distributors and suppliers, mass retail and home center stores, value retailers, grocery stores, online retailers, farm supply, sport retailers, and independent bike dealers. WD-40 Company was founded in 1953 and is headquartered in San Diego, California.

About RH

RH, together with its subsidiaries, operates as a retailer in the home furnishings market. The company offers products in various categories, including furniture, lighting, textiles, bathware, décor, outdoor and garden, baby, child, and teen furnishings. It provides its products through rh.com, rhbabyandchild.com, rhteen.com, rhmodern.com, and waterworks.com online channels, as well as operates RH Galleries, RH outlet stores, RH Guesthouse, and Waterworks showrooms in the United States, Canada, the United Kingdom, and Germany. The company was formerly known as Restoration Hardware Holdings, Inc. and changed its name to RH in January 2017. RH was incorporated in 2011 and is headquartered in Corte Madera, California.