Reviewing Grocery Outlet (NASDAQ:GO) & Yatsen (NYSE:YSG)

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

Institutional & Insider Ownership

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

Analyst Recommendations

This is a breakdown of recent ratings and price targets 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, suggesting a potential upside of 20.54%. Given Grocery Outlet’s stronger consensus rating and higher possible upside, research analysts plainly believe Grocery Outlet is more favorable than Yatsen.

Volatility and Risk

Grocery Outlet has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500. Comparatively, Yatsen has a beta of -1.59, suggesting that its stock price is 259% less volatile than the S&P 500.

Earnings and Valuation

This table compares Grocery Outlet and Yatsen”s top-line revenue, earnings per share 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)	-2.21
Yatsen	$614.62 million	0.41	-$11.56 million	($0.21)	-12.70

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.

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%

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.