Critical Review: Kenvue (NYSE:KVUE) vs. Honest (NASDAQ:HNST)

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

Insider and Institutional Ownership

45.5% of Honest shares are owned by institutional investors. Comparatively, 97.6% of Kenvue shares are owned by institutional investors. 9.4% of Honest shares are owned by company insiders. Comparatively, 1.6% of Kenvue shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Honest and Kenvue, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Honest	2	4	2	1	2.22
Kenvue	0	12	3	0	2.20

Honest presently has a consensus price target of $4.84, suggesting a potential downside of 15.68%. Kenvue has a consensus price target of $19.27, suggesting a potential upside of 4.83%. Given Kenvue’s higher possible upside, analysts plainly believe Kenvue is more favorable than Honest.

Valuation and Earnings

This table compares Honest and Kenvue”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Honest	$371.32 million	1.70	-$15.69 million	($0.11)	-52.18
Kenvue	$15.12 billion	2.33	$1.47 billion	$0.87	21.13

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

Volatility & Risk

Honest has a beta of 2.24, suggesting that its stock price is 124% more volatile than the S&P 500. Comparatively, Kenvue has a beta of 0.46, suggesting that its stock price is 54% less volatile than the S&P 500.

Profitability

This table compares Honest and Kenvue’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%
Kenvue	10.76%	21.22%	8.37%

Summary

Kenvue beats Honest on 11 of the 15 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 Kenvue

Kenvue Inc. operates as a consumer health company worldwide. The company operates through three segments: Self Care, Skin Health and Beauty, and Essential Health. The Self Care segment offers cough, cold and allergy, pain care, digestive health, smoking cessation, eye care, and other products under the Tylenol, Motrin, Benadryl, Nicorette, Zarbee's, ORSLTM, Rhinocort, Calpol, and Zyrtec brands. The Skin Health and Beauty segment provides face and body care, hair, sun, and other care products under the Neutrogena, Aveeno, Dr.Ci:Labo, Le Petit Marseillais, Lubriderm, Rogaine, and OGX brand names. The Essential Health segment offers oral and baby, women's health, wound, and other care products under the Listerine, Johnson's, Band-Aid, and Stayfree, o.b., tampons, Carefree, and Desitin Diaper Rash brands. The company was incorporated in 2022 and is headquartered in Skillman, New Jersey.