Head to Head Analysis: RH (NYSE:RH) and BJ’s Wholesale Club (NYSE:BJ)

BJ’s Wholesale Club (NYSE:BJ) and RH (NYSE:RH) are both consumer staples companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Profitability

This table compares BJ’s Wholesale Club and RH’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BJ’s Wholesale Club	2.70%	27.55%	7.90%
RH	3.63%	-567.82%	2.62%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for BJ’s Wholesale Club and RH, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BJ’s Wholesale Club	1	9	9	0	2.42
RH	5	8	7	0	2.10

BJ’s Wholesale Club currently has a consensus price target of $107.38, indicating a potential upside of 11.48%. RH has a consensus price target of $175.13, indicating a potential upside of 42.30%. Given RH’s higher possible upside, analysts clearly believe RH is more favorable than BJ’s Wholesale Club.

Volatility & Risk

BJ’s Wholesale Club has a beta of 0.27, meaning that its share price is 73% less volatile than the S&P 500. Comparatively, RH has a beta of 1.89, meaning that its share price is 89% more volatile than the S&P 500.

Insider and Institutional Ownership

98.6% of BJ’s Wholesale Club shares are held by institutional investors. Comparatively, 90.2% of RH shares are held by institutional investors. 1.1% of BJ’s Wholesale Club shares are held by company insiders. Comparatively, 26.9% 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 is poised for long-term growth.

Valuation and Earnings

This table compares BJ’s Wholesale Club and RH”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BJ’s Wholesale Club	$21.46 billion	0.57	$578.38 million	$4.38	21.99
RH	$3.44 billion	0.68	$124.79 million	$6.31	19.50

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

Summary

BJ’s Wholesale Club beats RH on 8 of the 14 factors compared between the two stocks.

About BJ’s Wholesale Club

BJ’s Wholesale Club Holdings, Inc. engages in the operation of membership warehouse clubs. Its product categories include grocery, household and pet, television and electronics, furniture, computer and tablets, patio and outdoor living, lawn and garden, baby and kids, toys, home, health and beauty, appliances, and jewelry. The company was founded in 1984 and is headquartered in Marlborough, MA.

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.