Contrasting Clorox (NYSE:CLX) & RH (NYSE:RH)

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

Risk and Volatility

Clorox has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500. Comparatively, RH has a beta of 2.1, suggesting that its share price is 110% more volatile than the S&P 500.

Insider and Institutional Ownership

78.5% of Clorox shares are owned by institutional investors. Comparatively, 90.2% of RH shares are owned by institutional investors. 0.6% of Clorox shares are owned by company insiders. Comparatively, 27.0% of RH shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Clorox and RH’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Clorox	11.17%	383.01%	14.57%
RH	3.63%	-567.82%	2.62%

Analyst Ratings

This is a breakdown of current ratings and price targets for Clorox and RH, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Clorox	4	12	1	0	1.82
RH	5	8	7	0	2.10

Clorox presently has a consensus target price of $115.93, indicating a potential upside of 13.41%. RH has a consensus target price of $176.47, indicating a potential upside of 38.74%. Given RH’s stronger consensus rating and higher probable upside, analysts clearly believe RH is more favorable than Clorox.

Earnings and Valuation

This table compares Clorox and RH”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Clorox	$7.10 billion	1.74	$810.00 million	$6.12	16.70
RH	$3.44 billion	0.70	$124.79 million	$6.31	20.16

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

Summary

RH beats Clorox on 8 of the 14 factors compared between the two stocks.

About Clorox

The Clorox Company manufactures and markets consumer and professional products worldwide. It operates through four segments: Health and Wellness, Household, Lifestyle, and International. The Health and Wellness segment offers cleaning products, such as laundry additives and home care products primarily under the Clorox, Clorox2, Scentiva, Pine-Sol, Liquid-Plumr, Tilex, and Formula 409 brands; professional cleaning and disinfecting products under the CloroxPro and Clorox Healthcare brands; professional food service products under the Hidden Valley brand; and vitamins, minerals and supplement products under the RenewLife, Natural Vitality, NeoCell, and Rainbow Light brands in the United States. The Household segment provides cat litter products under the Fresh Step and Scoop Away brands; bags and wraps under the Glad brand; and grilling products under the Kingsford brand in the United States. The Lifestyle segment offers dressings, dips, seasonings, and sauces primarily under the Hidden Valley brand; natural personal care products under the Burt's Bees brand; and water-filtration products under the Brita brand in the United States. The International segment provides laundry additives; home care products; water-filtration systems; digestive health products; grilling products; cat litter products; food products; bags and wraps; natural personal care products; and professional cleaning and disinfecting products internationally primarily under the Clorox, Ayudin, Clorinda, Poett, Pine-Sol, Glad, Brita, RenewLife, Ever Clean and Burt's Bees brands. It sells its products primarily through mass retailers; grocery outlets; warehouse clubs; dollar stores; home hardware centers; drug, pet, and military stores; third-party and owned e-commerce channels; and distributors, as well as a direct sales force The Clorox Company was founded in 1913 and is headquartered in Oakland, California.

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.