Bath & Body Works (NYSE:BBWI – Get Free Report) and Petco Health and Wellness (NASDAQ:WOOF – Get Free Report) are both retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, valuation, profitability, risk, dividends, earnings and institutional ownership.
Profitability
This table compares Bath & Body Works and Petco Health and Wellness’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Bath & Body Works | 12.43% | -44.03% | 14.45% |
| Petco Health and Wellness | -1.77% | -5.40% | -1.18% |
Risk and Volatility
Bath & Body Works has a beta of 1.89, suggesting that its stock price is 89% more volatile than the S&P 500. Comparatively, Petco Health and Wellness has a beta of 1.92, suggesting that its stock price is 92% more volatile than the S&P 500.
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Bath & Body Works | $7.31 billion | 0.90 | $878.00 million | $3.64 | 8.41 |
| Petco Health and Wellness | $6.12 billion | 0.15 | -$1.28 billion | ($0.37) | -8.00 |
Bath & Body Works has higher revenue and earnings than Petco Health and Wellness. Petco Health and Wellness is trading at a lower price-to-earnings ratio than Bath & Body Works, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current ratings and price targets for Bath & Body Works and Petco Health and Wellness, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Bath & Body Works | 0 | 5 | 13 | 0 | 2.72 |
| Petco Health and Wellness | 1 | 5 | 4 | 0 | 2.30 |
Bath & Body Works presently has a consensus target price of $45.06, indicating a potential upside of 47.28%. Petco Health and Wellness has a consensus target price of $3.85, indicating a potential upside of 30.00%. Given Bath & Body Works’ stronger consensus rating and higher possible upside, analysts plainly believe Bath & Body Works is more favorable than Petco Health and Wellness.
Institutional and Insider Ownership
95.1% of Bath & Body Works shares are owned by institutional investors. 0.3% of Bath & Body Works shares are owned by insiders. Comparatively, 2.4% of Petco Health and Wellness shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Summary
Bath & Body Works beats Petco Health and Wellness on 11 of the 14 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 Petco Health and Wellness
Petco Health and Wellness Company, Inc., operates as a health and wellness company, focuses on enhancing the lives of pets, pet parents, and its Petco partners in the United States, Mexico, and Puerto Rico. The company provides veterinary care, grooming, training, tele-health, and Vital Care and pet health insurance services, as well as veterinary services through Vetco mobile clinics. It also offers pet consumables, supplies, and services through its petco.com, petcoach.co, petinsurancequotes.com, and pupbox.com websites. The company offers its products under the WholeHearted, Reddy, and Well & Good brands. Petco Health and Wellness Company, Inc. was founded in 1965 and is headquartered in San Diego, California.
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