Sally Beauty (NYSE:SBH – Get Free Report) and Winmark (NASDAQ:WINA – Get Free Report) are both small-cap consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.
Analyst Ratings
This is a summary of current ratings and price targets for Sally Beauty and Winmark, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sally Beauty | 1 | 2 | 2 | 1 | 2.50 |
| Winmark | 0 | 1 | 0 | 0 | 2.00 |
Sally Beauty currently has a consensus target price of $20.40, suggesting a potential upside of 10.67%. Given Sally Beauty’s stronger consensus rating and higher possible upside, equities analysts plainly believe Sally Beauty is more favorable than Winmark.
Earnings and Valuation
This table compares Sally Beauty and Winmark”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Sally Beauty | $3.73 billion | 0.45 | $195.88 million | $2.03 | 9.08 |
| Winmark | $86.06 million | 11.24 | $41.65 million | $11.21 | 24.24 |
Sally Beauty has higher revenue and earnings than Winmark. Sally Beauty is trading at a lower price-to-earnings ratio than Winmark, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Sally Beauty and Winmark’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Sally Beauty | 5.36% | 24.07% | 7.17% |
| Winmark | 45.13% | -94.74% | 111.43% |
Institutional & Insider Ownership
73.3% of Winmark shares are held by institutional investors. 2.0% of Sally Beauty shares are held by insiders. Comparatively, 10.4% of Winmark shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Risk & Volatility
Sally Beauty has a beta of 1.09, meaning that its stock price is 9% more volatile than the S&P 500. Comparatively, Winmark has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500.
Summary
Sally Beauty beats Winmark on 8 of the 15 factors compared between the two stocks.
About Sally Beauty
Sally Beauty Holdings, Inc. is a specialty retailer and distributor of professional beauty products. It serves both individual consumers and salon professionals through retail stores, online channels and professional distribution. The company operates Sally Beauty, which sells products such as hair color and care items, styling tools, nail products and skincare. Its CosmoProf business supplies salons and other beauty professionals with products, equipment and related educational resources. Sally Beauty traces its roots to a beauty supply store opened in New Orleans in 1964.
About Winmark
Winmark Corporation is a franchisor focused on resale retail. Its franchise brands include Plato’s Closet, Once Upon A Child, Play It Again Sports, Style Encore and Music Go Round. The stores buy and sell secondhand clothing, children’s goods, sporting equipment, musical instruments and related merchandise. Founded in 1988 as Grow Biz International, the company adopted the Winmark name in 2001. Its franchise network serves communities in the United States and Canada, with Winmark providing franchisees with brand systems and business support.
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