Ulta Beauty (NASDAQ:ULTA) & Bath & Body Works (NYSE:BBWI) Head to Head Contrast

Bath & Body Works (NYSE:BBWI) and Ulta Beauty (NASDAQ:ULTA) are both retail/wholesale companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.

Institutional & Insider Ownership

95.1% of Bath & Body Works shares are owned by institutional investors. Comparatively, 90.4% of Ulta Beauty shares are owned by institutional investors. 0.3% of Bath & Body Works shares are owned by insiders. Comparatively, 0.4% of Ulta Beauty shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations and price targets for Bath & Body Works and Ulta Beauty, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bath & Body Works	1	6	9	0	2.50
Ulta Beauty	2	11	11	0	2.38

Bath & Body Works presently has a consensus price target of $42.50, suggesting a potential upside of 11.20%. Ulta Beauty has a consensus price target of $439.30, suggesting a potential upside of 3.58%. Given Bath & Body Works’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Bath & Body Works is more favorable than Ulta Beauty.

Risk and Volatility

Bath & Body Works has a beta of 1.83, suggesting that its stock price is 83% more volatile than the S&P 500. Comparatively, Ulta Beauty has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500.

Valuation & Earnings

This table compares Bath & Body Works and Ulta Beauty”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bath & Body Works	$7.43 billion	1.11	$878.00 million	$4.10	9.32
Ulta Beauty	$11.21 billion	1.75	$1.29 billion	$24.99	16.97

Ulta Beauty has higher revenue and earnings than Bath & Body Works. Bath & Body Works is trading at a lower price-to-earnings ratio than Ulta Beauty, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Bath & Body Works and Ulta Beauty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bath & Body Works	12.43%	-44.03%	14.45%
Ulta Beauty	10.58%	51.95%	20.88%

Summary

Ulta Beauty beats Bath & Body Works on 9 of the 14 factors compared between the two stocks.

About Bath & Body Works

Bath & Body Works, Inc. operates a specialty retailer of home fragrance, body care, and soaps and sanitizer products. It sells its products under the Bath & Body Works, White Barn, and other brand names through retail stores and e-commerce sites located in the United States and Canada, as well as through international stores operated by partners under franchise, license, and wholesale arrangements. The company was formerly known as L Brands, Inc. and changed its name to Bath & Body Works, Inc. in August 2021. Bath & Body Works, Inc. was founded in 1963 and is headquartered in Columbus, Ohio.

About Ulta Beauty

Ulta Beauty, Inc. operates as a specialty beauty retailer in the United States. The company offers branded and private label beauty products, including cosmetics, fragrance, haircare, skincare, bath and body products, professional hair products, and salon styling tools through its Ulta Beauty stores, shop-in-shops, Ulta.com website, and its mobile applications. It also offers beauty services, including hair, makeup, brow, and skin services at its stores. The company was formerly known as ULTA Salon, Cosmetics & Fragrance, Inc. and changed its name to Ulta Beauty, Inc. in January 2017. Ulta Beauty, Inc. was incorporated in 1990 and is based in Bolingbrook, Illinois.