Sally Beauty (NYSE: SBH) and Dover Saddlery (NASDAQ:DOVR) are both other specialty retailers – nec companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, valuation, dividends, institutional ownership and earnings.

Profitability

This table compares Sally Beauty and Dover Saddlery’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sally Beauty 3.67% N/A 6.75%
Dover Saddlery -3.40% -17.52% -6.75%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Sally Beauty and Dover Saddlery, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sally Beauty 1 11 2 0 2.07
Dover Saddlery 0 0 0 0 N/A

Sally Beauty currently has a consensus target price of $18.50, indicating a potential upside of 8.50%. Given Sally Beauty’s higher possible upside, equities research analysts clearly believe Sally Beauty is more favorable than Dover Saddlery.

Earnings & Valuation

This table compares Sally Beauty and Dover Saddlery’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sally Beauty $3.94 billion 0.56 $215.07 million $1.55 11.00
Dover Saddlery N/A N/A N/A $0.13 64.85

Sally Beauty has higher revenue and earnings than Dover Saddlery. Sally Beauty is trading at a lower price-to-earnings ratio than Dover Saddlery, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Sally Beauty has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500. Comparatively, Dover Saddlery has a beta of 0.36, meaning that its stock price is 64% less volatile than the S&P 500.

Summary

Sally Beauty beats Dover Saddlery on 8 of the 8 factors compared between the two stocks.

About Sally Beauty

Sally Beauty Holdings, Inc. is an international specialty retailer and distributor of professional beauty supplies with operations primarily in North America, South America and Europe. The Company operates through two business segments: Sally Beauty Supply and Beauty Systems Group (BSG). Sally Beauty Supply is a domestic and international chain of cash and carry retail stores, which offers professional beauty supplies to both salon professionals and retail customers primarily in North America, Puerto Rico, and parts of Europe and South America. BSG, including its franchise-based business Armstrong McCall, is a full service beauty supply distributor, which offers professional brands of beauty products directly to salons and salon professionals through its own sales force and professional-only stores (including franchise stores) in partially exclusive geographical territories in North America and parts of Europe.

About Dover Saddlery

Dover Saddlery, Inc. is a retailer and omni-channel marketer of equestrian products in the United States. The Company sells its products through omni-channel, including direct and retail. The Company offers a range of products required to own, ride, train and compete with a horse. The Company’s equestrian product line includes a range of separate items such as saddles, tack, specialized apparel, footwear, horse clothing, horse health and stable products. As of December 31, 2013, the Company, through its subsidiaries, operates twenty-one retail stores under the Dover Saddlery brand and one retail store under the Smith Brothers brand. It maintains two catalogs. The Dover Saddlery catalog caters to the mid to high-end, English-style, equestrian products customer. The Smith Brothers catalog is aimed at the Western-style, equestrian products customer. The Company offers web-base marketing through its Websites www.doversaddlery.com and www.smithbrothers.com.

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