Honest (NASDAQ:HNST – Get Free Report) and Beauty Health (NASDAQ:SKIN – Get Free Report) are both small-cap consumer staples companies, but which is the better business? We will compare the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.
Insider & Institutional Ownership
45.5% of Honest shares are held by institutional investors. Comparatively, 93.3% of Beauty Health shares are held by institutional investors. 9.4% of Honest shares are held by company insiders. Comparatively, 35.5% of Beauty Health 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 Beauty Health’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% |
| Beauty Health | -9.79% | -47.83% | -5.79% |
Risk and Volatility
Analyst Recommendations
This is a summary of recent ratings and recommmendations for Honest and Beauty Health, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Honest | 2 | 4 | 2 | 1 | 2.22 |
| Beauty Health | 1 | 5 | 1 | 0 | 2.00 |
Honest currently has a consensus target price of $4.84, suggesting a potential upside of 1.89%. Beauty Health has a consensus target price of $1.38, suggesting a potential upside of 129.17%. Given Beauty Health’s higher probable upside, analysts plainly believe Beauty Health is more favorable than Honest.
Valuation and Earnings
This table compares Honest and Beauty Health”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Honest | $371.32 million | 1.41 | -$15.69 million | ($0.11) | -43.18 |
| Beauty Health | $300.80 million | 0.26 | -$9.52 million | ($0.22) | -2.73 |
Beauty Health has lower revenue, but higher earnings than Honest. Honest is trading at a lower price-to-earnings ratio than Beauty Health, indicating that it is currently the more affordable of the two stocks.
Summary
Honest beats Beauty Health on 10 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 Beauty Health
The Beauty Health Company designs, develops, manufactures, markets, and sells aesthetic technologies and products worldwide. The company's flagship product includes HydraFacial that enhance the skin to cleanse, extract, and hydrate the skin with proprietary solutions and serums. Its products also comprise Syndeo, a Delivery System designs to connects providers to the consumer's preferences to create a more personalized experience; consumables, such as single-use tips, solutions, and serums used to provide a hydrafacial treatment; SkinStylus SteriLock Microsystem, a microneedling device used for the treatment of enhancing appearance of surgical or traumatic hypertrophic scars on the abdomen and facial acne scarring in Fitzpatrick skin types I, II, and III; and Keravive, a treatment for scalp health. The company was founded in 1997 and is headquartered in Long Beach, California.
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