Financial Contrast: BRC (NYSE:BRCC) versus RH (NYSE:RH)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
RH	2.57%	-67.71%	2.60%
BRC	-1.67%	-2.09%	-0.46%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for RH and BRC, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RH	3	4	10	0	2.41
BRC	0	2	2	0	2.50

RH presently has a consensus price target of $270.35, suggesting a potential upside of 34.65%. BRC has a consensus price target of $2.88, suggesting a potential upside of 75.84%. Given BRC’s stronger consensus rating and higher possible upside, analysts clearly believe BRC is more favorable than RH.

Volatility & Risk

RH has a beta of 2.16, suggesting that its stock price is 116% more volatile than the S&P 500. Comparatively, BRC has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500.

Insider & Institutional Ownership

90.2% of RH shares are held by institutional investors. Comparatively, 16.3% of BRC shares are held by institutional investors. 27.0% of RH shares are held by insiders. Comparatively, 69.0% of BRC shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RH	$3.18 billion	1.18	$72.41 million	$4.20	47.80
BRC	$391.49 million	0.60	-$2.95 million	($0.09)	-18.17

RH has higher revenue and earnings than BRC. BRC 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 BRC 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 BRC

BRC Inc., through its subsidiaries, purchases, roasts, and sells coffee, coffee accessories, and branded apparel in the United States. The company also produces media content, as well as sells coffee brewing equipment, and outdoor and lifestyle gear. It supports active military, veterans, and first responders. The company offers its products through grocery, specialty stores, and other intermediaries; and company operated and franchised Black Rifle Coffee retail coffee shop locations, as well as through e-commerce. BRC Inc. was founded in 2014 and is based in Salt Lake City, Utah.