Head to Head Review: Ollie’s Bargain Outlet (NASDAQ:OLLI) & RH (NYSE:RH)

RH (NYSE:RH) and Ollie’s Bargain Outlet (NASDAQ:OLLI) are both mid-cap consumer staples companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, dividends, institutional ownership, risk and profitability.

Earnings and Valuation

This table compares RH and Ollie’s Bargain Outlet”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RH	$3.44 billion	0.90	$124.79 million	$5.18	31.74
Ollie’s Bargain Outlet	$2.65 billion	1.56	$240.60 million	$4.05	16.90

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

Analyst Recommendations

This is a breakdown of recent ratings for RH and Ollie’s Bargain Outlet, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RH	4	9	7	0	2.15
Ollie’s Bargain Outlet	0	3	14	0	2.82

RH presently has a consensus target price of $172.53, indicating a potential upside of 4.93%. Ollie’s Bargain Outlet has a consensus target price of $124.00, indicating a potential upside of 81.13%. Given Ollie’s Bargain Outlet’s stronger consensus rating and higher possible upside, analysts clearly believe Ollie’s Bargain Outlet is more favorable than RH.

Risk and Volatility

RH has a beta of 1.88, indicating that its stock price is 88% more volatile than the S&P 500. Comparatively, Ollie’s Bargain Outlet has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500.

Profitability

This table compares RH and Ollie’s Bargain Outlet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RH	3.01%	423.79%	1.76%
Ollie’s Bargain Outlet	9.13%	13.43%	8.56%

Insider & Institutional Ownership

90.2% of RH shares are owned by institutional investors. 26.9% of RH shares are owned by insiders. Comparatively, 0.7% of Ollie’s Bargain Outlet shares are owned by 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.

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 Ollie’s Bargain Outlet

Ollie’s Bargain Outlet Holdings, Inc. is a holding company, which engages in the retail of closeouts, excess inventory, and salvage merchandise. It offers overstocks, package changes, manufacturer refurbished goods, and irregulars. The company’s products include housewares, food, books and stationery, bed and bath, floor coverings, electronics and toys. Ollie’s Bargain Outlet Holdings was founded by Mark Butler, Mort Bernstein, Oliver Rosenberg and Harry Coverman on July 29, 1982, and is headquartered in Harrisburg, PA.