Contrasting RH (NYSE:RH) & Clorox (NYSE:CLX)

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

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RH	$3.44 billion	0.71	$124.79 million	$6.31	20.48
Clorox	$7.10 billion	1.75	$810.00 million	$6.12	16.81

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

Risk & Volatility

RH has a beta of 2.1, meaning that its share price is 110% more volatile than the S&P 500. Comparatively, Clorox has a beta of 0.65, meaning that its share price is 35% less volatile than the S&P 500.

Insider & Institutional Ownership

90.2% of RH shares are held by institutional investors. Comparatively, 78.5% of Clorox shares are held by institutional investors. 27.0% of RH shares are held by company insiders. Comparatively, 0.6% of Clorox shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
RH	3.63%	-567.82%	2.62%
Clorox	11.17%	383.01%	14.57%

Analyst Recommendations

This is a summary of recent ratings for RH and Clorox, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RH	5	8	7	0	2.10
Clorox	3	13	1	0	1.88

RH currently has a consensus target price of $176.47, suggesting a potential upside of 36.58%. Clorox has a consensus target price of $115.13, suggesting a potential upside of 11.94%. Given RH’s stronger consensus rating and higher probable upside, analysts plainly believe RH is more favorable than Clorox.

Summary

RH beats Clorox on 8 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 Clorox

The Clorox Company manufactures and markets consumer and professional products worldwide. It operates through four segments: Health and Wellness, Household, Lifestyle, and International. The Health and Wellness segment offers cleaning products, such as laundry additives and home care products primarily under the Clorox, Clorox2, Scentiva, Pine-Sol, Liquid-Plumr, Tilex, and Formula 409 brands; professional cleaning and disinfecting products under the CloroxPro and Clorox Healthcare brands; professional food service products under the Hidden Valley brand; and vitamins, minerals and supplement products under the RenewLife, Natural Vitality, NeoCell, and Rainbow Light brands in the United States. The Household segment provides cat litter products under the Fresh Step and Scoop Away brands; bags and wraps under the Glad brand; and grilling products under the Kingsford brand in the United States. The Lifestyle segment offers dressings, dips, seasonings, and sauces primarily under the Hidden Valley brand; natural personal care products under the Burt's Bees brand; and water-filtration products under the Brita brand in the United States. The International segment provides laundry additives; home care products; water-filtration systems; digestive health products; grilling products; cat litter products; food products; bags and wraps; natural personal care products; and professional cleaning and disinfecting products internationally primarily under the Clorox, Ayudin, Clorinda, Poett, Pine-Sol, Glad, Brita, RenewLife, Ever Clean and Burt's Bees brands. It sells its products primarily through mass retailers; grocery outlets; warehouse clubs; dollar stores; home hardware centers; drug, pet, and military stores; third-party and owned e-commerce channels; and distributors, as well as a direct sales force The Clorox Company was founded in 1913 and is headquartered in Oakland, California.