Jumei International (NYSE: JMEI) and Sally Beauty (NYSE:SBH) are both small-cap retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, profitability, risk, analyst recommendations, valuation, institutional ownership and dividends.

Profitability

This table compares Jumei International and Sally Beauty’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Jumei International N/A N/A N/A
Sally Beauty 6.26% -73.82% 11.99%

Volatility and Risk

Jumei International has a beta of 1.55, meaning that its share price is 55% more volatile than the S&P 500. Comparatively, Sally Beauty has a beta of 0.29, meaning that its share price is 71% less volatile than the S&P 500.

Earnings & Valuation

This table compares Jumei International and Sally Beauty’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Jumei International $894.03 million 0.46 -$5.68 million N/A N/A
Sally Beauty $3.94 billion 0.48 $215.07 million $1.80 8.57

Sally Beauty has higher revenue and earnings than Jumei International.

Institutional and Insider Ownership

17.4% of Jumei International shares are owned by institutional investors. 1.5% of Sally Beauty shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings for Jumei International and Sally Beauty, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Jumei International 0 0 0 0 N/A
Sally Beauty 1 9 1 0 2.00

Sally Beauty has a consensus price target of $16.78, indicating a potential upside of 8.81%. Given Sally Beauty’s higher possible upside, analysts clearly believe Sally Beauty is more favorable than Jumei International.

Summary

Sally Beauty beats Jumei International on 8 of the 11 factors compared between the two stocks.

About Jumei International

Jumei International Holding Limited operates as an online retailer of beauty products in the People's Republic of China. The company offers beauty products, such as cosmetics, skin care, cosmetic applicators, fragrance, and body care products; and beauty products for men, and baby and children. It also provides apparel and other lifestyle products, including women's wear, footwear, lingerie, handbags and luggage, men's wear, sportswear and sporting goods, accessories, home goods, and other lifestyle products, as well as baby, children, and maternity products; and snacks and health supplements. The company sells its products through Jumei.com and Jumeiglobal.com Websites, mobile platform, and physical stores. Jumei International Holding Limited was founded in 2009 and is headquartered in Beijing, the People's Republic of China.

About Sally Beauty

Sally Beauty Holdings, Inc., together with its subsidiaries, 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, skin and nail care, beauty sundries, and styling tools for retail customers and salon professionals. This segment also provides products under third-party brands, such as OPI, China Glaze, Wella, Clairol, Conair, and Hot Shot Tools, as well as exclusive-label merchandise. As of September 30, 2017, it operated 3,763 company-operated retail stores with 2,883 stores in the United States, including Puerto Rico; and 880 company-operated stores located in Canada, Mexico, the United Kingdom, Ireland, Belgium, France, Germany, the Netherlands, Spain, Chile, and Peru under the Sally Beauty banner, as well as 19 franchised stores in the United Kingdom, Belgium, and certain other European countries. The Beauty Systems Group segment offers professional beauty products, including hair color and care, skin and nail care, beauty sundries, and styling tools directly to salons and salon professionals through its sales force, as well as through company-operated and franchised stores. This segment also sells products under third-party brands, such as Paul Mitchell, Wella, Schwarzkopf, Kenra, Goldwell, Joico, and Aquage. This segment had 1,200 company-operated stores with 1,099 located in the United States, including Puerto Rico; and 101 retail stores located in Canada under the CosmoProf banner in the United States and Canada, as well as 168 franchised stores under the Armstrong McCall name in the United States, Canada, and Mexico. The company also distributes its products through full-service/exclusive distribution, open-line distribution, and direct and mega-salon stores. Sally Beauty Holdings, Inc. was founded in 1964 and is headquartered in Denton, Texas.

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