Krispy Kreme (NASDAQ:DNUT) and RH (NYSE:RH) Critical Comparison

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

Valuation and Earnings

This table compares Krispy Kreme and RH”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Krispy Kreme	$1.67 billion	0.34	$3.10 million	($2.65)	-1.25
RH	$3.27 billion	1.27	$72.41 million	$4.20	52.66

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Krispy Kreme	-29.33%	-5.55%	-1.98%
RH	2.57%	-67.71%	2.60%

Risk and Volatility

Krispy Kreme has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500. Comparatively, RH has a beta of 2.15, meaning that its share price is 115% more volatile than the S&P 500.

Insider and Institutional Ownership

81.7% of Krispy Kreme shares are held by institutional investors. Comparatively, 90.2% of RH shares are held by institutional investors. 3.0% of Krispy Kreme shares are held by company insiders. Comparatively, 27.0% of RH shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings for Krispy Kreme and RH, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Krispy Kreme	2	4	3	0	2.11
RH	3	4	10	0	2.41

Krispy Kreme presently has a consensus price target of $6.80, indicating a potential upside of 105.44%. RH has a consensus price target of $272.29, indicating a potential upside of 23.11%. Given Krispy Kreme’s higher possible upside, equities research analysts clearly believe Krispy Kreme is more favorable than RH.

Summary

RH beats Krispy Kreme on 12 of the 14 factors compared between the two stocks.

About Krispy Kreme

Krispy Kreme, Inc., together with its subsidiaries, produces doughnuts in the United States, the United Kingdom, Ireland, Australia, New Zealand, Mexico, Canada, Japan, and internationally. The company operates through three segments: U.S., International, and Market Development. The company offers doughnut experiences through hot light theater and fresh shops, delivered fresh daily branded cabinets and merchandising units within grocery and convenience stores, quick service restaurants, club memberships, drug stores, and ecommerce, as well as through its branded sweet treat line comprising Krispy Kreme branded sweet treats. It also provides cookies under the Insomnia Cookies brand, cookie cakes, ice cream, cookie-wiches, and brownies; and operates Krispy Kreme company-owned shops and franchise shops. The company was formerly known as Krispy Kreme Doughnuts, Inc. and changed its name to Krispy Kreme, Inc. in May 2021. Krispy Kreme, Inc. was founded in 1937 and is based in Charlotte, North Carolina.

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.