Head to Head Survey: Bath & Body Works (NYSE:BBWI) vs. Sally Beauty (NYSE:SBH)

Sally Beauty (NYSE:SBH) and Bath & Body Works (NYSE:BBWI) are both retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Profitability

This table compares Sally Beauty and Bath & Body Works’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sally Beauty	4.13%	31.37%	6.56%
Bath & Body Works	12.43%	-44.03%	14.45%

Volatility and Risk

Sally Beauty has a beta of 1.56, suggesting that its share price is 56% more volatile than the S&P 500. Comparatively, Bath & Body Works has a beta of 1.82, suggesting that its share price is 82% more volatile than the S&P 500.

Earnings and Valuation

This table compares Sally Beauty and Bath & Body Works”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sally Beauty	$3.72 billion	0.30	$153.41 million	$1.44	7.67
Bath & Body Works	$7.43 billion	1.07	$878.00 million	$4.10	8.95

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.

Institutional and Insider Ownership

95.1% of Bath & Body Works shares are owned by institutional investors. 1.6% of Sally Beauty shares are owned by insiders. Comparatively, 0.3% of Bath & Body Works shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for Sally Beauty and Bath & Body Works, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sally Beauty	1	2	3	0	2.33
Bath & Body Works	1	6	10	0	2.53

Sally Beauty presently has a consensus target price of $13.60, suggesting a potential upside of 23.08%. Bath & Body Works has a consensus target price of $43.06, suggesting a potential upside of 17.37%. Given Sally Beauty’s higher possible upside, equities research analysts plainly believe Sally Beauty is more favorable than Bath & Body Works.

Summary

Bath & Body Works beats Sally Beauty on 11 of the 14 factors compared between the two stocks.

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.

About Bath & Body Works

Bath & Body Works, Inc. operates a specialty retailer of home fragrance, body care, and soaps and sanitizer products. It sells its products under the Bath & Body Works, White Barn, and other brand names through retail stores and e-commerce sites located in the United States and Canada, as well as through international stores operated by partners under franchise, license, and wholesale arrangements. The company was formerly known as L Brands, Inc. and changed its name to Bath & Body Works, Inc. in August 2021. Bath & Body Works, Inc. was founded in 1963 and is headquartered in Columbus, Ohio.