Financial Contrast: Yatsen (NYSE:YSG) versus Grocery Outlet (NASDAQ:GO)

Grocery Outlet (NASDAQ:GO) and Yatsen (NYSE:YSG) are both small-cap consumer staples companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, earnings, risk and valuation.

Insider and Institutional Ownership

99.9% of Grocery Outlet shares are held by institutional investors. 4.5% of Grocery Outlet shares are held by company insiders. Comparatively, 29.0% of Yatsen shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Grocery Outlet and Yatsen’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Grocery Outlet	-8.08%	5.69%	1.86%
Yatsen	-3.04%	-4.54%	-3.49%

Volatility & Risk

Grocery Outlet has a beta of 0.66, suggesting that its stock price is 34% less volatile than the S&P 500. Comparatively, Yatsen has a beta of -1.65, suggesting that its stock price is 265% less volatile than the S&P 500.

Valuation & Earnings

This table compares Grocery Outlet and Yatsen”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Grocery Outlet	$4.69 billion	0.18	-$224.91 million	($3.88)	-2.19
Yatsen	$614.62 million	0.49	-$11.56 million	($0.21)	-15.14

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Grocery Outlet and Yatsen, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Grocery Outlet	2	11	0	0	1.85
Yatsen	1	0	0	0	1.00

Grocery Outlet presently has a consensus price target of $10.32, indicating a potential upside of 21.25%. Given Grocery Outlet’s stronger consensus rating and higher probable upside, research analysts clearly believe Grocery Outlet is more favorable than Yatsen.

Summary

Grocery Outlet beats Yatsen on 8 of the 13 factors compared between the two stocks.

About Grocery Outlet

Grocery Outlet Holding Corp. operates as a retailer of consumables and fresh products sold through independently operated stores in the United States. Its stores offer products in various categories, such as dairy and deli, produce, floral, fresh meat, seafood products, grocery, general merchandise, health and beauty care, frozen food, beer and wine, and ethnic products. The company was founded in 1946 and is headquartered in Emeryville, California.

About Yatsen

Yatsen Holding Limited, together with its subsidiaries, engages in the development and sale of beauty products under the Perfect Diary, Little Ondine, Pink Bear, Abby’s Choice, GalÃnic, DR.WU, Eve Lom, and EANTiM brands in the People’s Republic of China. The company offers color cosmetics for lips, eyes, and face; skin care products, including face serums and creams, eye creams, masks, toners, makeup removers, cleansers, ampoules, and anti-acne patches; and beauty tools and kits, sunscreen products, and beauty devices. It sells its products through stores and online channel. The company was formerly known as Mangrove Bay Ecommerce Holding (Cayman) and changed its name to Yatsen Holding Limited in January 2019. Yatsen Holding Limited was founded in 2016 and is headquartered in Guangzhou, China.