Head to Head Analysis: ARKO (NASDAQ:ARKO) versus RH (NYSE:RH)

ARKO (NASDAQ:ARKO) and RH (NYSE:RH) are both consumer staples companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, profitability and valuation.

Volatility & Risk

ARKO has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500. Comparatively, RH has a beta of 2.12, indicating that its share price is 112% more volatile than the S&P 500.

Valuation and Earnings

This table compares ARKO and RH”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ARKO	$7.64 billion	0.09	$20.84 million	$0.14	45.93
RH	$3.18 billion	0.97	$72.41 million	$5.54	29.77

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

Institutional and Insider Ownership

78.3% of ARKO shares are owned by institutional investors. Comparatively, 90.2% of RH shares are owned by institutional investors. 22.5% of ARKO shares are owned by company insiders. Comparatively, 27.0% of RH shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares ARKO and RH’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ARKO	0.30%	8.60%	0.63%
RH	3.22%	-161.72%	2.70%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for ARKO and RH, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ARKO	1	2	1	1	2.40
RH	3	10	8	0	2.24

ARKO currently has a consensus price target of $7.00, suggesting a potential upside of 8.86%. RH has a consensus price target of $231.19, suggesting a potential upside of 40.18%. Given RH’s higher possible upside, analysts plainly believe RH is more favorable than ARKO.

Summary

RH beats ARKO on 10 of the 15 factors compared between the two stocks.

About ARKO

Arko Corp. operates convenience stores in the United States. It operates through Retail, Wholesale, Fleet Fueling, and GPMP segments. The Retail segment engages in the sale of fuel and merchandise to retail consumers. Its Wholesale segment supplies fuel to third-party dealers and consignment agents. The Fleet Fueling segment supplies fuel to proprietary and third-party cardlock, and issuance of proprietary fuel cards. Its GPMP segment supplies fuel to retail and wholesale segments. The company is based in Richmond, Virginia.

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.