Contrasting Ulta Beauty (NASDAQ:ULTA) & Seven and I (OTCMKTS:SVNDY)

Seven and I (OTCMKTS:SVNDY) and Ulta Beauty (NASDAQ:ULTA) are both large-cap retail/wholesale companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, profitability, dividends, analyst recommendations, risk, valuation and institutional ownership.

Profitability

This table compares Seven and I and Ulta Beauty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Seven and I	2.08%	6.54%	2.37%
Ulta Beauty	10.31%	48.78%	19.55%

Insider & Institutional Ownership

0.0% of Seven and I shares are held by institutional investors. Comparatively, 90.4% of Ulta Beauty shares are held by institutional investors. 0.4% of Ulta Beauty shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Seven and I and Ulta Beauty, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Seven and I	0	1	0	0	2.00
Ulta Beauty	1	12	13	1	2.52

Ulta Beauty has a consensus target price of $550.38, indicating a potential upside of 6.98%. Given Ulta Beauty’s stronger consensus rating and higher possible upside, analysts clearly believe Ulta Beauty is more favorable than Seven and I.

Valuation & Earnings

This table compares Seven and I and Ulta Beauty”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Seven and I	$78.57 billion	0.43	$1.14 billion	$0.63	20.69
Ulta Beauty	$11.30 billion	2.04	$1.20 billion	$26.08	19.73

Ulta Beauty has lower revenue, but higher earnings than Seven and I. Ulta Beauty is trading at a lower price-to-earnings ratio than Seven and I, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Seven and I has a beta of 0.46, suggesting that its stock price is 54% less volatile than the S&P 500. Comparatively, Ulta Beauty has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.

Summary

Ulta Beauty beats Seven and I on 13 of the 15 factors compared between the two stocks.

About Seven and I

Seven & i Holdings Co., Ltd. operates convenience stores, superstores, department stores, supermarkets, and specialty stores. It operates through six segments: Domestic Convenience Store operations, Overseas Convenience Store Operations, Superstore Operations, Department and Specialty Store Operations, Financial Services, and Others. The company engages in the operation of convenience stores comprising directly managed corporate stores and franchised stores; retail business that provides daily life necessities, such as food and other daily necessities and dollar merchandise and services; banking, leasing, and credit card business; and real estate business. Seven & i Holdings Co., Ltd. was incorporated in 2005 and is headquartered in Tokyo, Japan.

About Ulta Beauty

Ulta Beauty, Inc. operates as a specialty beauty retailer in the United States. The company offers branded and private label beauty products, including cosmetics, fragrance, haircare, skincare, bath and body products, professional hair products, and salon styling tools through its Ulta Beauty stores, shop-in-shops, Ulta.com website, and its mobile applications. It also offers beauty services, including hair, makeup, brow, and skin services at its stores. The company was formerly known as ULTA Salon, Cosmetics & Fragrance, Inc. and changed its name to Ulta Beauty, Inc. in January 2017. Ulta Beauty, Inc. was incorporated in 1990 and is based in Bolingbrook, Illinois.