Cabela’s (NYSE: CAB) and Sally Beauty Holdings (NYSE:SBH) are both mid-cap retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, valuation, institutional ownership, risk, earnings, dividends and profitabiliy.

Institutional & Insider Ownership

58.3% of Cabela’s shares are held by institutional investors. 21.0% of Cabela’s shares are held by company insiders. Comparatively, 1.0% of Sally Beauty Holdings shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Cabela’s has a beta of 0.21, indicating that its stock price is 79% less volatile than the S&P 500. Comparatively, Sally Beauty Holdings has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Cabela’s and Sally Beauty Holdings, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cabela’s 0 7 2 0 2.22
Sally Beauty Holdings 1 6 3 0 2.20

Cabela’s presently has a consensus price target of $59.36, indicating a potential upside of 3.32%. Sally Beauty Holdings has a consensus price target of $26.75, indicating a potential upside of 38.17%. Given Sally Beauty Holdings’ higher possible upside, analysts plainly believe Sally Beauty Holdings is more favorable than Cabela’s.

Profitability

This table compares Cabela’s and Sally Beauty Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cabela’s 3.49% 8.97% 2.02%
Sally Beauty Holdings 5.92% -84.81% 11.79%

Valuation and Earnings

This table compares Cabela’s and Sally Beauty Holdings’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cabela’s $4.10 billion 0.97 $468.84 million $2.08 27.62
Sally Beauty Holdings $3.94 billion 0.68 $597.29 million $1.61 12.02

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

Summary

Cabela’s beats Sally Beauty Holdings on 8 of the 14 factors compared between the two stocks.

Cabela’s Company Profile

Cabela’s Incorporated is an omni-channel retailer of hunting, fishing, camping, shooting sports and related outdoor merchandise. The Company offers its customers a selection of national and regional brand products, including its Cabela’s brand. The Company’s segments include Merchandising and Financial Services. The Merchandising segment sells products and services through the Company’s retail stores, its e-commerce Websites (Cabelas.com and Cabelas.ca), and its catalogs. The United States merchandising and Canada merchandising operating segments have been aggregated into its Merchandising segment. The Financial Services segment issues co-branded credit cards, which are available through all of its channels. The Company’s product assortment includes merchandise and equipment for hunting, fishing, marine use, camping, and recreational sport shooting, along with casual and outdoor apparel and footwear, optics, vehicle accessories, and gifts and home furnishings with an outdoor theme.

Sally Beauty Holdings Company Profile

Sally Beauty Holdings, Inc. is an international specialty retailer and distributor of professional beauty supplies with operations primarily in North America, South America and Europe. The Company operates through two business segments: Sally Beauty Supply and Beauty Systems Group (BSG). Sally Beauty Supply is a domestic and international chain of cash and carry retail stores, which offers professional beauty supplies to both salon professionals and retail customers primarily in North America, Puerto Rico, and parts of Europe and South America. BSG, including its franchise-based business Armstrong McCall, is a full service beauty supply distributor, which offers professional brands of beauty products directly to salons and salon professionals through its own sales force and professional-only stores (including franchise stores) in partially exclusive geographical territories in North America and parts of Europe.

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