Comparing RH (NYSE:RH) and High Tide (NASDAQ:HITI)

RH (NYSE:RH) and High Tide (NASDAQ:HITI) are both consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, valuation, profitability, institutional ownership, dividends and analyst recommendations.

Insider and Institutional Ownership

90.2% of RH shares are owned by institutional investors. Comparatively, 4.5% of High Tide shares are owned by institutional investors. 26.9% of RH shares are owned by insiders. Comparatively, 12.4% of High Tide shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares RH and High Tide”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RH	$3.44 billion	0.63	$124.79 million	$5.62	20.27
High Tide	$425.10 million	0.55	-$36.23 million	($0.23)	-11.39

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

Volatility and Risk

RH has a beta of 1.91, indicating that its stock price is 91% more volatile than the S&P 500. Comparatively, High Tide has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500.

Profitability

This table compares RH and High Tide’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RH	3.23%	132.79%	1.63%
High Tide	-4.73%	5.13%	1.55%

Analyst Ratings

This is a summary of recent ratings and recommmendations for RH and High Tide, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RH	3	9	7	0	2.21
High Tide	1	0	3	0	2.50

RH currently has a consensus target price of $164.86, suggesting a potential upside of 44.71%. High Tide has a consensus target price of $5.62, suggesting a potential upside of 114.69%. Given High Tide’s stronger consensus rating and higher probable upside, analysts clearly believe High Tide is more favorable than RH.

Summary

RH beats High Tide on 12 of the 14 factors compared between the two stocks.

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 High Tide

High Tide Inc. engages in the cannabis retail business in Canada, the United States, and internationally. The company operates through Retail and Wholesale segments. It operates licensed retail cannabis stores; and provides data analytics services. In addition, the company manufactures and distributes consumption accessories. Further, it sells its products through online sales via e-commerce platform. The company offers its products under the Daily High Club, DankStop, FABCBD, GC, Nuleaf, Smoke Cartel, and Blessed CBD brands. The company was formerly known as High Tide Ventures Inc. and changed its name to High Tide Inc. in October 2018. High Tide Inc. was founded in 2009 and is headquartered in Calgary, Canada.