Sally Beauty (NYSE:SBH) vs. Itochu (OTCMKTS:ITOCY) Head-To-Head Review

Sally Beauty (NYSE:SBH) and Itochu (OTCMKTS:ITOCY) are both retail/wholesale companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, dividends, profitability, risk and valuation.

Earnings and Valuation

This table compares Sally Beauty and Itochu”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sally Beauty	$3.72 billion	0.42	$153.41 million	$1.86	8.48
Itochu	$96.69 billion	0.87	$5.89 billion	$7.66	15.25

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

Risk and Volatility

Sally Beauty has a beta of 1.38, suggesting that its stock price is 38% more volatile than the S&P 500. Comparatively, Itochu has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for Sally Beauty and Itochu, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sally Beauty	1	2	3	1	2.57
Itochu	0	0	0	0	0.00

Sally Beauty currently has a consensus target price of $13.88, indicating a potential downside of 12.04%. Given Sally Beauty’s stronger consensus rating and higher possible upside, equities analysts clearly believe Sally Beauty is more favorable than Itochu.

Profitability

This table compares Sally Beauty and Itochu’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sally Beauty	5.26%	28.11%	7.05%
Itochu	5.93%	13.99%	5.80%

Institutional & Insider Ownership

0.1% of Itochu shares are held by institutional investors. 1.6% of Sally Beauty shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Sally Beauty beats Itochu on 8 of the 15 factors compared between the two stocks.

About Sally Beauty

Sally Beauty Holdings, Inc. operates as a specialty retailer and distributor of professional beauty supplies. The company operates through two segments, Sally Beauty Supply and Beauty Systems Group. The Sally Beauty Supply segment offers beauty products, including hair color and care products, skin and nail care products, styling tools, and other beauty products for retail customers, salons, and salon professionals. This segment also provides products under Wella and L'Oreal brands. The Beauty Systems Group segment offers professional beauty products, such as hair color and care products, skin and nail care products, styling tools, and other beauty items directly to salons and salon professionals through its professional-only stores, e-commerce platforms, and sales force, as well as through franchised stores under the Armstrong McCall store name. This segment also sells products under Paul Mitchell and Wella brands. It operates stores and franchised units in the United States, Puerto Rico, Canada, Mexico, Chile, Peru, the United Kingdom, Ireland, Belgium, France, the Netherlands, Spain, and Germany. The company distributes its products through full-service/exclusive distributors and open-line distributors. Sally Beauty Holdings, Inc. was founded in 1964 and is headquartered in Denton, Texas.

About Itochu

ITOCHU Corporation engages in trading and importing/exporting various products worldwide. The company’s Textile segment produces and sells raw materials, threads, and textiles; and garments, home furnishings, and industrial materials, as well as trades in industrial textile and lifestyle products. Its Machinery segment engages in the plants, bridges, railways, and other infrastructure; power generation, transmission, transformation, and sale; water, environment and waste-related; ship trading; renewable and alternative energy; and waste recycling businesses. The company’s Metals & Minerals segment engages in development of metal and mineral resource; processing and steel products; trading of iron ore, coal, pig iron and ferrous raw materials, non-ferrous and light metals, steel products, nuclear fuels, and greenhouse gas emissions; and recycling and waste treatment activities. Its Energy & Chemicals segment trades in crude oil, petroleum products, LPG, LNG, natural gas, hydrogen, organic and inorganic chemicals, functional food, synthetic resins, packaging materials, household goods, fine chemicals, pharmaceuticals, and electronic materials, as well as engages in the solar and biomass power generation, electricity trading, and the energy storage cell businesses. The company’s Food segment produces, distributes, and retails food products. Its General Products & Realty segment produces and sells paper, pulp, natural rubber, tire, and wood products and materials; develops and operates real estate properties, such as housing, logistics facilities, and other projects; and offers logistics services. The company’s ICT & Financial Business segment offers IT, Internet related and venture capital, mobile telephone equipment, BPO, broadcasting and communications, entertainment and content, healthcare and preventive medicine outsourcing, and financial and insurance brokerage services. The company was founded in 1858 and is headquartered in Tokyo, Japan.