Head-To-Head Review: RH (NYSE:RH) & Colgate-Palmolive (NYSE:CL)

RH (NYSE:RH) and Colgate-Palmolive (NYSE:CL) are both consumer staples companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, profitability, institutional ownership, dividends, valuation and risk.

Volatility & Risk

RH has a beta of 2.23, indicating that its stock price is 123% more volatile than the S&P 500. Comparatively, Colgate-Palmolive has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for RH and Colgate-Palmolive, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RH	4	7	10	0	2.29
Colgate-Palmolive	1	5	8	0	2.50

RH presently has a consensus price target of $259.29, suggesting a potential upside of 34.20%. Colgate-Palmolive has a consensus price target of $91.50, suggesting a potential upside of 18.68%. Given RH’s higher possible upside, research analysts plainly believe RH is more favorable than Colgate-Palmolive.

Valuation and Earnings

This table compares RH and Colgate-Palmolive”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RH	$3.18 billion	1.14	$72.41 million	$5.37	35.98
Colgate-Palmolive	$20.10 billion	3.10	$2.89 billion	$3.56	21.66

Colgate-Palmolive has higher revenue and earnings than RH. Colgate-Palmolive 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 RH and Colgate-Palmolive’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RH	3.20%	-113.58%	3.08%
Colgate-Palmolive	14.55%	377.63%	17.86%

Insider & Institutional Ownership

90.2% of RH shares are owned by institutional investors. Comparatively, 80.4% of Colgate-Palmolive shares are owned by institutional investors. 27.0% of RH shares are owned by insiders. Comparatively, 0.4% of Colgate-Palmolive shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

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 Colgate-Palmolive

Colgate-Palmolive Company, together with its subsidiaries, manufactures and sells consumer products in the United States and internationally. It operates through two segments: Oral, Personal and Home Care; and Pet Nutrition. The Oral, Personal and Home Care segment offers toothpaste, toothbrushes, mouthwash, bar and liquid hand soaps, shower gels, shampoos, conditioners, deodorants and antiperspirants, skin health products, dishwashing detergents, fabric conditioners, household cleaners, and other related items. This segment markets and sells its products under various brands, which include Colgate, Darlie, elmex, hello, meridol, Sorriso, Tom's of Maine, Irish Spring, Palmolive, Protex, Sanex, Softsoap, Lady Speed Stick, Speed Stick, EltaMD, Filorga, PCA SKIN, Ajax, Axion, Fabuloso, Murphy, Suavitel, and Soupline to a range of traditional and eCommerce retailers, wholesalers, and distributors. It includes pharmaceutical products for dentists and other oral health professionals. Its Pet Nutrition segment offers pet nutrition products for everyday nutritional needs under the Hill's Science Diet brand; and a range of therapeutic pet products to help nutritionally support dogs and cats in different stages of health under the Hill's Prescription Diet brand. This segment markets and sells its products through pet supply retailers, veterinarians, and eCommerce retailers. Colgate-Palmolive Company was founded in 1806 and is headquartered in New York, New York.