Critical Review: BRC (NYSE:BRCC) versus Yatsen (NYSE:YSG)

Yatsen (NYSE:YSG) and BRC (NYSE:BRCC) are both small-cap consumer staples companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, earnings, risk, valuation, analyst recommendations and institutional ownership.

Volatility & Risk

Yatsen has a beta of -2.08, meaning that its stock price is 308% less volatile than the S&P 500. Comparatively, BRC has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500.

Valuation & Earnings

This table compares Yatsen and BRC”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Yatsen	$464.90 million	0.86	-$97.02 million	($0.69)	-6.18
BRC	$391.49 million	0.71	-$2.95 million	($0.14)	-8.04

BRC has lower revenue, but higher earnings than Yatsen. BRC is trading at a lower price-to-earnings ratio than Yatsen, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Yatsen and BRC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Yatsen	-11.54%	-15.36%	-11.80%
BRC	-2.86%	-11.48%	-2.60%

Analyst Recommendations

This is a summary of current ratings and price targets for Yatsen and BRC, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Yatsen	1	0	0	0	1.00
BRC	1	2	2	0	2.20

BRC has a consensus price target of $2.50, indicating a potential upside of 122.22%. Given BRC’s stronger consensus rating and higher possible upside, analysts clearly believe BRC is more favorable than Yatsen.

Institutional and Insider Ownership

16.3% of BRC shares are owned by institutional investors. 29.0% of Yatsen shares are owned by company insiders. Comparatively, 69.0% of BRC shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

BRC beats Yatsen on 11 of the 14 factors compared between the two stocks.

About Yatsen

Yatsen Holding Limited, together with its subsidiaries, engages in the development and sale of beauty products under the Perfect Diary, Little Ondine, Pink Bear, Abby’s Choice, GalÃnic, DR.WU, Eve Lom, and EANTiM brands in the People’s Republic of China. The company offers color cosmetics for lips, eyes, and face; skin care products, including face serums and creams, eye creams, masks, toners, makeup removers, cleansers, ampoules, and anti-acne patches; and beauty tools and kits, sunscreen products, and beauty devices. It sells its products through stores and online channel. The company was formerly known as Mangrove Bay Ecommerce Holding (Cayman) and changed its name to Yatsen Holding Limited in January 2019. Yatsen Holding Limited was founded in 2016 and is headquartered in Guangzhou, China.

About BRC

BRC Inc., through its subsidiaries, purchases, roasts, and sells coffee, coffee accessories, and branded apparel in the United States. The company also produces media content, as well as sells coffee brewing equipment, and outdoor and lifestyle gear. It supports active military, veterans, and first responders. The company offers its products through grocery, specialty stores, and other intermediaries; and company operated and franchised Black Rifle Coffee retail coffee shop locations, as well as through e-commerce. BRC Inc. was founded in 2014 and is based in Salt Lake City, Utah.