Winmark (NASDAQ:WINA – Get Free Report) and Sally Beauty (NYSE:SBH – Get Free Report) are both small-cap consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, valuation, earnings, profitability, institutional ownership and dividends.
Volatility & Risk
Winmark has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500. Comparatively, Sally Beauty has a beta of 1.09, meaning that its stock price is 9% more volatile than the S&P 500.
Valuation & Earnings
This table compares Winmark and Sally Beauty”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Winmark | $86.06 million | 11.39 | $41.65 million | $11.21 | 24.57 |
| Sally Beauty | $3.70 billion | 0.49 | $195.88 million | $1.92 | 10.13 |
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 Winmark and Sally Beauty’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Winmark | 45.13% | -94.74% | 111.43% |
| Sally Beauty | 5.16% | 24.36% | 7.07% |
Institutional and Insider Ownership
73.3% of Winmark shares are held by institutional investors. 10.4% of Winmark shares are held by insiders. Comparatively, 2.0% of Sally Beauty shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for Winmark and Sally Beauty, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Winmark | 0 | 1 | 0 | 0 | 2.00 |
| Sally Beauty | 1 | 2 | 2 | 1 | 2.50 |
Sally Beauty has a consensus target price of $17.40, indicating a potential downside of 10.54%. Given Sally Beauty’s stronger consensus rating and higher possible upside, analysts plainly believe Sally Beauty is more favorable than Winmark.
Summary
Sally Beauty beats Winmark on 8 of the 15 factors compared between the two stocks.
About Winmark
Winmark Corporation, a resale company operates as a franchisor for small business in the United States and Canada. The company franchises retail stores concepts that buy, sell and trade merchandise. It also operates middle-market equipment leasing business. In addition, the company buys and sells used clothing and accessories geared toward the teenage and young adult market under Plato’s Closet brand; and operates stores which buys and sells used and new children’s clothing, toys, furniture, equipment, and accessories primarily to parents of children ages infant to 12 years under the Once Upon A Child brand. Further, it buys, sells, trades in, and used and new sporting goods, equipment, and accessories for various athletic activities including team sports, such as baseball/softball, hockey, football, lacrosse, and soccer, as well as fitness, ski/snowboard, golf, and others under the Play It Again Sports brand; and buys and sells used women’s apparel, shoes, and accessories under the Style Encore brand. Additionally, the company buys, sells, trades in, and used and new musical instruments, speakers, amplifiers, music-related electronics, and related accessories under the Music Go Round brand. Winmark Corporation was incorporated in 1988 and is headquartered in Minneapolis, Minnesota.
About Sally Beauty
Sally Beauty Holdings, Inc. operates as a specialty retailer and distributor of professional beauty supplies. The company operates through two segments, Sally Beauty Supply and Beauty Systems Group. The Sally Beauty Supply segment offers beauty products, including hair color and care products, skin and nail care products, styling tools, and other beauty products for retail customers, salons, and salon professionals. This segment also provides products under Wella and L'Oreal brands. The Beauty Systems Group segment offers professional beauty products, such as hair color and care products, skin and nail care products, styling tools, and other beauty items directly to salons and salon professionals through its professional-only stores, e-commerce platforms, and sales force, as well as through franchised stores under the Armstrong McCall store name. This segment also sells products under Paul Mitchell and Wella brands. It operates stores and franchised units in the United States, Puerto Rico, Canada, Mexico, Chile, Peru, the United Kingdom, Ireland, Belgium, France, the Netherlands, Spain, and Germany. The company distributes its products through full-service/exclusive distributors and open-line distributors. Sally Beauty Holdings, Inc. was founded in 1964 and is headquartered in Denton, Texas.
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