Kimberly-Clark (NASDAQ:KMB) vs. Honest (NASDAQ:HNST) Critical Review

Honest (NASDAQ:HNST) and Kimberly-Clark (NASDAQ:KMB) are both consumer staples companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, risk, institutional ownership, analyst recommendations, earnings, profitability and dividends.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Honest and Kimberly-Clark, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Honest	2	4	2	1	2.22
Kimberly-Clark	1	11	4	1	2.29

Honest presently has a consensus price target of $4.84, suggesting a potential downside of 9.45%. Kimberly-Clark has a consensus price target of $117.36, suggesting a potential upside of 19.40%. Given Kimberly-Clark’s stronger consensus rating and higher probable upside, analysts plainly believe Kimberly-Clark is more favorable than Honest.

Risk & Volatility

Honest has a beta of 2.24, meaning that its share price is 124% more volatile than the S&P 500. Comparatively, Kimberly-Clark has a beta of 0.25, meaning that its share price is 75% less volatile than the S&P 500.

Valuation & Earnings

This table compares Honest and Kimberly-Clark”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Honest	$371.32 million	1.58	-$15.69 million	($0.11)	-48.59
Kimberly-Clark	$16.45 billion	1.99	$2.02 billion	$5.88	16.72

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

Insider & Institutional Ownership

45.5% of Honest shares are held by institutional investors. Comparatively, 76.3% of Kimberly-Clark shares are held by institutional investors. 9.4% of Honest shares are held by company insiders. Comparatively, 0.7% of Kimberly-Clark shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Honest and Kimberly-Clark’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Honest	-3.56%	4.31%	3.33%
Kimberly-Clark	11.79%	143.92%	14.21%

Summary

Kimberly-Clark beats Honest on 12 of the 14 factors compared between the two stocks.

About Honest

The Honest Company, Inc. manufactures and sells diapers and wipes, skin and personal care, and household and wellness products. The company also offers baby clothing and nursery bedding products. It sells its products through digital and retail sales channels, such as its website and third-party ecommerce sites, as well as brick and mortar retailers. The company was incorporated in 2012 and is headquartered in Los Angeles, California.

About Kimberly-Clark

Kimberly-Clark Corporation, together with its subsidiaries, manufactures and markets personal care and consumer tissue products in the United States. It operates through three segments: Personal Care, Consumer Tissue, and K-C Professional. The company’s Personal Care segment offers disposable diapers, training and youth pants, swimpants, baby wipes, feminine and incontinence care products, reusable underwear, and other related products under the Huggies, Pull-Ups, Little Swimmers, GoodNites, DryNites, Sweety, Kotex, U by Kotex, Intimus, Thinx, Poise, Depend, Plenitud, Softex, and other brand names. Its Consumer Tissue segment provides facial and bathroom tissues, paper towels, napkins, and related products under the Kleenex, Scott, Cottonelle, Viva, Andrex, Scottex, Neve, and other brand names. The company’s K-C Professional segment offers wipers, tissues, towels, apparel, personal protective equipment, soaps, and sanitizers under the Kleenex, Scott, WypAll, Kimtech, and KleenGuard brands. It also sells household use products directly to supermarkets, mass merchandisers, drugstores, warehouse clubs, variety and department stores, and other retail outlets, as well as through other distributors and e-commerce; and away-from-home use products directly to distributors, manufacturing, lodging, office building, food service, and public facilities, as well as through e-commerce. Kimberly-Clark Corporation was founded in 1872 and is headquartered in Dallas, Texas.