Financial Analysis: RH (NYSE:RH) vs. BBB Foods (NYSE:TBBB)

RH (NYSE:RH) and BBB Foods (NYSE:TBBB) are both mid-cap consumer staples companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, profitability, earnings, dividends, valuation, risk and analyst recommendations.

Earnings and Valuation

This table compares RH and BBB Foods”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RH	$3.44 billion	0.82	$124.79 million	$6.31	23.67
BBB Foods	$4.08 billion	1.16	-$148.23 million	($1.55)	-25.68

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

Insider and Institutional Ownership

90.2% of RH shares are held by institutional investors. Comparatively, 8.4% of BBB Foods shares are held by institutional investors. 26.9% of RH shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares RH and BBB Foods’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RH	3.63%	-567.82%	2.62%
BBB Foods	-3.95%	-79.86%	-11.65%

Analyst Ratings

This is a summary of recent ratings and price targets for RH and BBB Foods, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RH	5	8	7	0	2.10
BBB Foods	2	2	5	0	2.33

RH presently has a consensus target price of $174.80, suggesting a potential upside of 17.03%. BBB Foods has a consensus target price of $43.14, suggesting a potential upside of 8.39%. Given RH’s higher possible upside, equities research analysts clearly believe RH is more favorable than BBB Foods.

Risk & Volatility

RH has a beta of 1.91, meaning that its share price is 91% more volatile than the S&P 500. Comparatively, BBB Foods has a beta of 0.03, meaning that its share price is 97% less volatile than the S&P 500.

Summary

RH beats BBB Foods on 10 of the 14 factors compared between the two stocks.

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.

About BBB Foods

BBB Foods Inc., through its subsidiaries, operates a chain of grocery retail stores in Mexico. It offers household cleaning, personal hyenine, cosmetics and beauty, pharmacy, and general merchandise products, as well as jellies and desserts, foods and drinks, pet supplies, coffee, tea, chocolates, breads, dry and frozen foods, snacks and sweets, and toilet papers and napkins. The company also provides branded, private label, and spot products. It serves low-to-middle income households through online channels. BBB Foods Inc. was incorporated in 2004 and is headquartered in Mexico City, Mexico.