Analyzing Bath & Body Works (NYSE:BBWI) and Build-A-Bear Workshop (NYSE:BBW)

Bath & Body Works (NYSE:BBWI) and Build-A-Bear Workshop (NYSE:BBW) are both retail/wholesale companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, institutional ownership, valuation, earnings and profitability.

Profitability

This table compares Bath & Body Works and Build-A-Bear Workshop’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bath & Body Works	9.88%	-48.43%	15.18%
Build-A-Bear Workshop	11.34%	41.14%	19.56%

Risk and Volatility

Bath & Body Works has a beta of 1.52, suggesting that its share price is 52% more volatile than the S&P 500. Comparatively, Build-A-Bear Workshop has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Bath & Body Works and Build-A-Bear Workshop, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bath & Body Works	0	6	11	0	2.65
Build-A-Bear Workshop	0	1	4	0	2.80

Bath & Body Works presently has a consensus target price of $36.39, suggesting a potential upside of 48.69%. Build-A-Bear Workshop has a consensus target price of $68.00, suggesting a potential upside of 25.17%. Given Bath & Body Works’ higher probable upside, research analysts plainly believe Bath & Body Works is more favorable than Build-A-Bear Workshop.

Dividends

Bath & Body Works pays an annual dividend of $0.80 per share and has a dividend yield of 3.3%. Build-A-Bear Workshop pays an annual dividend of $0.88 per share and has a dividend yield of 1.6%. Bath & Body Works pays out 23.7% of its earnings in the form of a dividend. Build-A-Bear Workshop pays out 19.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Build-A-Bear Workshop has raised its dividend for 1 consecutive years.

Insider & Institutional Ownership

95.1% of Bath & Body Works shares are held by institutional investors. Comparatively, 79.3% of Build-A-Bear Workshop shares are held by institutional investors. 0.3% of Bath & Body Works shares are held by company insiders. Comparatively, 5.8% of Build-A-Bear Workshop shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Bath & Body Works and Build-A-Bear Workshop”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bath & Body Works	$7.37 billion	0.68	$798.00 million	$3.37	7.26
Build-A-Bear Workshop	$496.40 million	1.44	$51.78 million	$4.46	12.18

Bath & Body Works has higher revenue and earnings than Build-A-Bear Workshop. Bath & Body Works is trading at a lower price-to-earnings ratio than Build-A-Bear Workshop, indicating that it is currently the more affordable of the two stocks.

Summary

Build-A-Bear Workshop beats Bath & Body Works on 10 of the 17 factors compared between the two stocks.

About Bath & Body Works

Bath & Body Works, Inc. is a specialty retailers and home to America’s Favorite Fragrances, offering a breadth of exclusive fragrances for the body and home, including the selling collections for fine fragrance mist, body lotion and body cream, 3-wick candles, home fragrance diffusers and liquid hand soap. The company was founded by Leslie Herbert Wexner in 1963 and is headquartered in Columbus, OH.

About Build-A-Bear Workshop

Build-A-Bear Workshop, Inc. operates as a multi-channel retailer of plush animals and related products in the United States, Canada, the United Kingdom, Ireland, and internationally. The company operates through three segments: Direct-to-Consumer, Commercial, and International Franchising. Its merchandise comprises various styles of plush products to be stuffed, pre-stuffed plush products, and sounds and scents that can be added to the stuffed animals, as well as range of clothing, shoes and accessories, and other toy and novelty items, including family sleepwear. The company operates its stores under the Build-A-Bear Workshop brand name; and sells its products through its e-commerce sites and third-party marketplace sites. Build-A-Bear Workshop, Inc. was founded in 1997 and is headquartered in Saint Louis, Missouri.