Head-To-Head Review: Williams-Sonoma (WSM) versus Restoration Hardware Holdings (NYSE:RH)

Restoration Hardware Holdings (NYSE: RH) and Williams-Sonoma (NYSE:WSM) are both mid-cap retail/wholesale companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, profitabiliy and earnings.

Valuation and Earnings

This table compares Restoration Hardware Holdings and Williams-Sonoma’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Restoration Hardware Holdings $2.24 billion 1.03 $170.90 million $0.35 199.63
Williams-Sonoma $5.10 billion 0.79 $657.11 million $3.44 13.47

Williams-Sonoma has higher revenue and earnings than Restoration Hardware Holdings. Williams-Sonoma is trading at a lower price-to-earnings ratio than Restoration Hardware Holdings, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

97.2% of Williams-Sonoma shares are held by institutional investors. 18.8% of Restoration Hardware Holdings shares are held by company insiders. Comparatively, 1.0% of Williams-Sonoma shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Williams-Sonoma pays an annual dividend of $1.56 per share and has a dividend yield of 3.4%. Restoration Hardware Holdings does not pay a dividend. Williams-Sonoma pays out 45.3% of its earnings in the form of a dividend. Williams-Sonoma has increased its dividend for 7 consecutive years.

Profitability

This table compares Restoration Hardware Holdings and Williams-Sonoma’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Restoration Hardware Holdings 0.66% 6.42% 2.55%
Williams-Sonoma 5.99% 25.51% 12.56%

Analyst Ratings

This is a summary of recent ratings and price targets for Restoration Hardware Holdings and Williams-Sonoma, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Restoration Hardware Holdings 1 13 3 0 2.12
Williams-Sonoma 1 14 6 0 2.24

Restoration Hardware Holdings presently has a consensus target price of $54.87, suggesting a potential downside of 21.47%. Williams-Sonoma has a consensus target price of $57.39, suggesting a potential upside of 23.90%. Given Williams-Sonoma’s stronger consensus rating and higher possible upside, analysts plainly believe Williams-Sonoma is more favorable than Restoration Hardware Holdings.

Risk and Volatility

Restoration Hardware Holdings has a beta of 1.48, suggesting that its share price is 48% more volatile than the S&P 500. Comparatively, Williams-Sonoma has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500.

Summary

Williams-Sonoma beats Restoration Hardware Holdings on 12 of the 17 factors compared between the two stocks.

Restoration Hardware Holdings Company Profile

RH, formerly Restoration Hardware Holdings, Inc., is a retailer in the home furnishings marketplace. As of January 28, 2017, the Company had two segments: RH Segment and Waterworks. It offers merchandise assortments across a range of categories, including furniture, lighting, textiles, bathware, decor, outdoor and garden, tableware, and child and teen furnishings. The Company classifies its sales into furniture and non-furniture product lines. The Furniture category includes both indoor and outdoor furniture. The Non-furniture category includes lighting, textiles, fittings, fixtures, surfaces, accessories and home decor. The Company’s business is integrated across its channels of distribution consisting of its stores, Source Books and Websites. The Company also owns a controlling interest in Design Investors WW Acquisition Company, LLC, which owns the business operating under the name ‘Waterworks’.

Williams-Sonoma Company Profile

Williams-Sonoma, Inc. is a multi-channel specialty retailer of products for the home. The Company operates retail stores in the United States, Canada, Puerto Rico, Australia and the United Kingdom. It operates through two segments: e-commerce and retail. The e-commerce segment has various merchandising strategies, such as Williams-Sonoma, Pottery Barn, Pottery Barn Kids, West Elm, PBteen, Williams-Sonoma Home, Rejuvenation and Mark and Graham, which sell its products through the Company’s e-commerce Websites and direct-mail catalogs. The retail segment has various merchandising strategies, such as Williams-Sonoma, Pottery Barn, Pottery Barn Kids, West Elm and Rejuvenation, which sell its products through the Company’s retail stores. The Company franchises its brands to third parties in a number of countries in the Middle East, the Philippines and Mexico. The Company’s products are also available to customers through its catalogs and online across the world.

Receive News & Ratings for Restoration Hardware Holdings Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Restoration Hardware Holdings Inc. and related companies with MarketBeat.com's FREE daily email newsletter.

Latest News

Leave a Reply