Head to Head Contrast: RH (NYSE:RH) versus BJ’s Wholesale Club (NYSE:BJ)

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

Insider and Institutional Ownership

90.2% of RH shares are held by institutional investors. Comparatively, 98.6% of BJ’s Wholesale Club shares are held by institutional investors. 26.9% of RH shares are held by company insiders. Comparatively, 1.1% of BJ’s Wholesale Club shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RH	$3.44 billion	0.75	$124.79 million	$6.31	21.63
BJ’s Wholesale Club	$21.46 billion	0.51	$578.38 million	$4.35	19.88

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

Volatility & Risk

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for RH and BJ’s Wholesale Club, as provided by MarketBeat.com.

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

RH currently has a consensus price target of $175.13, suggesting a potential upside of 28.35%. BJ’s Wholesale Club has a consensus price target of $106.75, suggesting a potential upside of 23.44%. Given RH’s higher probable upside, research analysts plainly believe RH is more favorable than BJ’s Wholesale Club.

Profitability

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

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

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.

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.