Critical Comparison: Grocery Outlet (NASDAQ:GO) & Yatsen (NYSE:YSG)

Yatsen (NYSE:YSG) and Grocery Outlet (NASDAQ:GO) are both small-cap consumer staples companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, dividends, earnings, institutional ownership and profitability.

Valuation and Earnings

This table compares Yatsen and Grocery Outlet”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Yatsen	$614.62 million	0.47	-$11.56 million	($0.21)	-14.78
Grocery Outlet	$4.69 billion	0.18	-$224.91 million	($3.88)	-2.18

Yatsen has higher earnings, but lower revenue than Grocery Outlet. Yatsen is trading at a lower price-to-earnings ratio than Grocery Outlet, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Yatsen and Grocery Outlet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Yatsen	-3.04%	-4.54%	-3.49%
Grocery Outlet	-8.08%	5.69%	1.86%

Analyst Ratings

This is a breakdown of recent recommendations for Yatsen and Grocery Outlet, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Yatsen	1	0	0	0	1.00
Grocery Outlet	2	11	0	0	1.85

Grocery Outlet has a consensus target price of $10.32, indicating a potential upside of 21.96%. Given Grocery Outlet’s stronger consensus rating and higher possible upside, analysts plainly believe Grocery Outlet is more favorable than Yatsen.

Institutional & Insider Ownership

99.9% of Grocery Outlet shares are owned by institutional investors. 29.0% of Yatsen shares are owned by company insiders. Comparatively, 4.5% of Grocery Outlet shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

Yatsen has a beta of -1.59, suggesting that its stock price is 259% less volatile than the S&P 500. Comparatively, Grocery Outlet has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500.

Summary

Grocery Outlet beats Yatsen on 8 of the 13 factors compared between the two stocks.

About Yatsen

Yatsen Holding Limited, together with its subsidiaries, engages in the development and sale of beauty products under the Perfect Diary, Little Ondine, Pink Bear, Abby’s Choice, GalÃnic, DR.WU, Eve Lom, and EANTiM brands in the People’s Republic of China. The company offers color cosmetics for lips, eyes, and face; skin care products, including face serums and creams, eye creams, masks, toners, makeup removers, cleansers, ampoules, and anti-acne patches; and beauty tools and kits, sunscreen products, and beauty devices. It sells its products through stores and online channel. The company was formerly known as Mangrove Bay Ecommerce Holding (Cayman) and changed its name to Yatsen Holding Limited in January 2019. Yatsen Holding Limited was founded in 2016 and is headquartered in Guangzhou, China.

About Grocery Outlet

Grocery Outlet Holding Corp. operates as a retailer of consumables and fresh products sold through independently operated stores in the United States. Its stores offer products in various categories, such as dairy and deli, produce, floral, fresh meat, seafood products, grocery, general merchandise, health and beauty care, frozen food, beer and wine, and ethnic products. The company was founded in 1946 and is headquartered in Emeryville, California.