Critical Analysis: Reynolds Consumer Products (NASDAQ:REYN) vs. Barnes & Noble Education (NYSE:BNED)

Reynolds Consumer Products (NASDAQ:REYN) and Barnes & Noble Education (NYSE:BNED) are both consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, valuation, profitability, dividends and earnings.

Profitability

This table compares Reynolds Consumer Products and Barnes & Noble Education’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Reynolds Consumer Products	8.70%	16.05%	7.24%
Barnes & Noble Education	-0.57%	-20.37%	-5.70%

Risk & Volatility

Reynolds Consumer Products has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500. Comparatively, Barnes & Noble Education has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500.

Institutional & Insider Ownership

26.8% of Reynolds Consumer Products shares are owned by institutional investors. Comparatively, 38.5% of Barnes & Noble Education shares are owned by institutional investors. 0.4% of Reynolds Consumer Products shares are owned by company insiders. Comparatively, 1.2% of Barnes & Noble Education shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Reynolds Consumer Products and Barnes & Noble Education”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Reynolds Consumer Products	$3.72 billion	1.24	$301.00 million	$1.57	13.94
Barnes & Noble Education	$1.73 billion	0.21	-$65.82 million	($0.32)	-32.83

Reynolds Consumer Products has higher revenue and earnings than Barnes & Noble Education. Barnes & Noble Education is trading at a lower price-to-earnings ratio than Reynolds Consumer Products, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Reynolds Consumer Products and Barnes & Noble Education, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Reynolds Consumer Products	0	7	0	0	2.00
Barnes & Noble Education	1	0	0	0	1.00

Reynolds Consumer Products presently has a consensus price target of $23.60, indicating a potential upside of 7.86%. Given Reynolds Consumer Products’ stronger consensus rating and higher possible upside, research analysts clearly believe Reynolds Consumer Products is more favorable than Barnes & Noble Education.

Summary

Reynolds Consumer Products beats Barnes & Noble Education on 10 of the 13 factors compared between the two stocks.

About Reynolds Consumer Products

Reynolds Consumer Products Inc. produces and sells products in cooking, waste and storage, and tableware product categories in the United States and internationally. It operates through four segments: Reynolds Cooking & Baking, Hefty Waste & Storage, Hefty Tableware, and Presto Products. The Reynolds Cooking & Baking segment produces aluminum foil, disposable aluminum pans, parchment paper, freezer paper, wax paper, butcher paper, plastic wrap, baking cups, oven bags, and slow cooker liners under the Reynolds Wrap, Reynolds KITCHENS, and EZ Foil brands in the United States, as well as under the ALCAN brand in Canada and under the Diamond brand internationally. The Hefty Waste & Storage segment offers trash bags under the Hefty Ultra Strong and Hefty Strong brands; and food storage bags under the Hefty and Baggies brands. This segment also provides a suite of products, including compostable bags, bags made from recycled materials, and the orange bags. The Hefty Tableware segment offers disposable and compostable plates, bowls, platters, cups, and cutlery under the Hefty brand. The Presto Products segment primarily sells store brand products in food storage bags, trash bags, reusable storage containers, and plastic wrap categories. It offers both branded and store brand products to grocery stores, mass merchants, warehouse clubs, discount chains, dollar stores, drug stores, home improvement stores, military outlets, and eCommerce retailers. The company was founded in 1947 and is headquartered in Lake Forest, Illinois. Reynolds Consumer Products Inc. is a subsidiary of Packaging Finance Limited.

About Barnes & Noble Education

Barnes and Noble Education, Inc. engages in the management and operation of bookstore chains in universities. It operates through the Retail and Wholesale segments. The Retail segment operates college, university, and K-12 school bookstores, physical bookstores, and virtual bookstores. The Wholesale segment sells and distributes new and used textbooks to physical bookstores. The company was founded by Leonard S, Riggio in 1965 and is headquartered in Basking Ridge, NJ.