Critical Survey: Albertsons Companies (NYSE:ACI) and RH (NYSE:RH)

RH (NYSE:RH) and Albertsons Companies (NYSE:ACI) are both mid-cap consumer staples companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, earnings and institutional ownership.

Volatility and Risk

RH has a beta of 2.21, meaning that its share price is 121% more volatile than the S&P 500. Comparatively, Albertsons Companies has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500.

Profitability

This table compares RH and Albertsons Companies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RH	3.20%	-113.58%	3.08%
Albertsons Companies	1.20%	36.39%	4.45%

Analyst Recommendations

This is a breakdown of current recommendations for RH and Albertsons Companies, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RH	3	7	10	0	2.35
Albertsons Companies	1	5	10	0	2.56

RH presently has a consensus price target of $259.69, indicating a potential upside of 62.79%. Albertsons Companies has a consensus price target of $23.43, indicating a potential upside of 30.12%. Given RH’s higher possible upside, research analysts clearly believe RH is more favorable than Albertsons Companies.

Earnings & Valuation

This table compares RH and Albertsons Companies”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RH	$3.18 billion	0.94	$72.41 million	$5.37	29.71
Albertsons Companies	$80.39 billion	0.12	$958.60 million	$1.69	10.65

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

Institutional and Insider Ownership

90.2% of RH shares are held by institutional investors. Comparatively, 71.4% of Albertsons Companies shares are held by institutional investors. 27.0% of RH shares are held by company insiders. Comparatively, 1.4% of Albertsons Companies shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

RH beats Albertsons Companies on 8 of the 13 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 Albertsons Companies

Albertsons Companies, Inc., through its subsidiaries, engages in the operation of food and drug stores in the United States. The company’s food and drug retail stores offer grocery products, general merchandise, health and beauty care products, pharmacy, fuel, and other items and services. It also manufactures and processes food products for sale in stores. It operates stores under various banners, including Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Jewel-Osco, Acme, Shaw’s, Star Market, United Supermarkets, Market Street, Haggen, Kings Food Markets, and Balducci’s Food Lovers Market; and pharmacies, in-store branded coffee shops, adjacent fuel centers, distribution centers, and manufacturing facilities, as well as various digital platforms. Albertsons Companies, Inc. was founded in 1860 and is headquartered in Boise, Idaho. Albertsons Companies, Inc. operates as a subsidiary of Albertsons Investor Holdings LLC.