Sally Beauty (NYSE:SBH) versus Bath & Body Works (NYSE:BBWI) Head to Head Comparison

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

Analyst Recommendations

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

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

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

Profitability

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

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

Insider & Institutional Ownership

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

Earnings & Valuation

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

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

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.

Volatility and Risk

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

Summary

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

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.

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.