Comparing Winmark (NASDAQ:WINA) & Ulta Beauty (NASDAQ:ULTA)

Ulta Beauty (NASDAQ:ULTA) and Winmark (NASDAQ:WINA) are both retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, valuation, earnings and dividends.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ulta Beauty	10.45%	49.73%	20.15%
Winmark	49.48%	-98.49%	103.78%

Valuation and Earnings

This table compares Ulta Beauty and Winmark”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ulta Beauty	$11.30 billion	1.96	$1.20 billion	$25.60	19.27
Winmark	$81.29 million	16.39	$39.95 million	$11.23	33.42

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Ulta Beauty and Winmark, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ulta Beauty	1	11	13	0	2.48
Winmark	0	0	0	0	0.00

Ulta Beauty presently has a consensus target price of $465.04, indicating a potential downside of 5.73%. Given Ulta Beauty’s stronger consensus rating and higher probable upside, analysts clearly believe Ulta Beauty is more favorable than Winmark.

Volatility & Risk

Ulta Beauty has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500. Comparatively, Winmark has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500.

Insider & Institutional Ownership

90.4% of Ulta Beauty shares are owned by institutional investors. Comparatively, 73.3% of Winmark shares are owned by institutional investors. 0.2% of Ulta Beauty shares are owned by insiders. Comparatively, 10.1% of Winmark shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Ulta Beauty beats Winmark on 9 of the 14 factors compared between the two stocks.

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.

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.