Head-To-Head Review: BRC (NYSE:BRCC) and Leslie’s (NASDAQ:LESL)

BRC (NYSE:BRCC) and Leslie’s (NASDAQ:LESL) are both small-cap consumer staples companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.

Insider and Institutional Ownership

16.3% of BRC shares are owned by institutional investors. 54.9% of BRC shares are owned by company insiders. Comparatively, 0.5% of Leslie’s shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares BRC and Leslie’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BRC	-2.99%	-21.46%	-5.42%
Leslie’s	-22.69%	N/A	-7.11%

Analyst Recommendations

This is a summary of recent ratings and target prices for BRC and Leslie’s, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BRC	1	1	1	0	2.00
Leslie’s	2	6	0	0	1.75

BRC presently has a consensus target price of $2.33, suggesting a potential upside of 153.07%. Leslie’s has a consensus target price of $6.55, suggesting a potential upside of 272.16%. Given Leslie’s’ higher possible upside, analysts plainly believe Leslie’s is more favorable than BRC.

Valuation and Earnings

This table compares BRC and Leslie’s”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BRC	$398.26 million	0.58	-$11.91 million	($0.14)	-6.59
Leslie’s	$1.24 billion	0.01	-$236.97 million	($29.66)	-0.06

BRC has higher earnings, but lower revenue than Leslie’s. BRC is trading at a lower price-to-earnings ratio than Leslie’s, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

BRC has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500. Comparatively, Leslie’s has a beta of 1.22, indicating that its share price is 22% more volatile than the S&P 500.

Summary

BRC beats Leslie’s on 9 of the 14 factors compared between the two stocks.

About BRC

BRC Inc., through its subsidiaries, purchases, roasts, and sells coffee, coffee accessories, and branded apparel in the United States. The company also produces media content, as well as sells coffee brewing equipment, and outdoor and lifestyle gear. It supports active military, veterans, and first responders. The company offers its products through grocery, specialty stores, and other intermediaries; and company operated and franchised Black Rifle Coffee retail coffee shop locations, as well as through e-commerce. BRC Inc. was founded in 2014 and is based in Salt Lake City, Utah.

About Leslie’s

Leslie’s, Inc. operates as a direct-to-consumer pool and spa care brand in the United States. The company markets and sells pool and spa supplies and related products and services. It also offers various pool and spa maintenance items, such as chemicals, equipment and parts, cleaning and maintenance equipment, safety, recreational, and fitness related products. In addition, the company provides installation and repair services for pool and spa equipment. It also sells its products through e-commerce websites and third-party marketplaces. The company offers complimentary, commercial-grade in-store, water testing, and analysis services. It serves the residential, professional, and commercial consumers. Leslie’s, Inc. was founded in 1963 and is based in Phoenix, Arizona.