Comparing Bath & Body Works (NYSE:BBWI) & ODP (NASDAQ:ODP)

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

Dividends

Bath & Body Works pays an annual dividend of $0.80 per share and has a dividend yield of 4.0%. ODP pays an annual dividend of $0.10 per share and has a dividend yield of 0.4%. Bath & Body Works pays out 24.6% of its earnings in the form of a dividend. ODP pays out -28.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Volatility and Risk

Bath & Body Works has a beta of 1.51, suggesting that its share price is 51% more volatile than the S&P 500. Comparatively, ODP has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500.

Valuation and Earnings

This table compares Bath & Body Works and ODP”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bath & Body Works	$7.31 billion	0.55	$798.00 million	$3.25	6.09
ODP	$6.53 billion	0.13	-$3.00 million	($0.35)	-80.00

Bath & Body Works has higher revenue and earnings than ODP. ODP 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 held by institutional investors. Comparatively, 99.6% of ODP shares are held by institutional investors. 0.3% of Bath & Body Works shares are held by company insiders. Comparatively, 3.6% of ODP shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Bath & Body Works	9.50%	-47.35%	14.46%
ODP	-0.14%	12.84%	3.01%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Bath & Body Works and ODP, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bath & Body Works	1	13	5	0	2.21
ODP	1	2	0	0	1.67

Bath & Body Works presently has a consensus target price of $23.61, indicating a potential upside of 19.26%. ODP has a consensus target price of $28.00, indicating a potential upside of 0.00%. Given Bath & Body Works’ stronger consensus rating and higher probable upside, equities analysts plainly believe Bath & Body Works is more favorable than ODP.

Summary

Bath & Body Works beats ODP on 12 of the 16 factors compared between the two stocks.

About Bath & Body Works

Bath & Body Works, Inc. is a specialty retailers and home to America’s Favorite Fragrances, offering a breadth of exclusive fragrances for the body and home, including the selling collections for fine fragrance mist, body lotion and body cream, 3-wick candles, home fragrance diffusers and liquid hand soap. The company was founded by Leslie Herbert Wexner in 1963 and is headquartered in Columbus, OH.

About ODP

The ODP Corporation provides business services and supplies, products, and digital workplace technology solutions for small, medium, and enterprise businesses in the United States, Puerto Rico, and the U.S. Virgin Islands. The company operates through four divisions: ODP Business Solutions, Office Depot, Veyer, and Varis. The ODP Business Solutions division offers adjacency products, including cleaning, janitorial, and breakroom supplies, office furniture, technology products; and copy and print services through sales force, catalogs, telesales, and through Internet websites. This segment also engages in office supply distribution business. The Office Depot division sells office supplies, technology products and solutions, business machines and related supplies, cleaning, breakroom and facilities products, personal protective equipment, and office furniture; and offers business services, including copying, printing, digital imaging, mailing, shipping, and technology support services through a fully integrated omni-channel platform of 980 Office Depot and OfficeMax retail stores, and through www.officedepot.com. The Veyer division engages in supply chain, distribution, procurement, and global sourcing operations. The Varis division operates tech-enabled B2B indirect procurement marketplace, where buyers and suppliers to transact through the platform's consumer-like buying experience, advanced spend management tools, network of suppliers, and technology capabilities. The company offers its products under various brands, including Office Depot, OfficeMax, and Grand&Toy, as well as others. The ODP Corporation was incorporated in 1986 and is headquartered in Boca Raton, Florida.