Head to Head Analysis: Spectrum Brands (NYSE:SPB) & Honest (NASDAQ:HNST)

Spectrum Brands (NYSE:SPB) and Honest (NASDAQ:HNST) are both small-cap consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.

Earnings & Valuation

This table compares Spectrum Brands and Honest”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Spectrum Brands	$2.81 billion	0.53	$99.70 million	$3.96	16.10
Honest	$378.34 million	0.72	-$6.12 million	$0.06	40.67

Spectrum Brands has higher revenue and earnings than Honest. Spectrum Brands is trading at a lower price-to-earnings ratio than Honest, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and price targets for Spectrum Brands and Honest, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Spectrum Brands	0	2	4	0	2.67
Honest	2	4	1	0	1.86

Spectrum Brands presently has a consensus price target of $77.00, indicating a potential upside of 20.78%. Honest has a consensus price target of $3.00, indicating a potential upside of 22.95%. Given Honest’s higher possible upside, analysts clearly believe Honest is more favorable than Spectrum Brands.

Institutional & Insider Ownership

45.5% of Honest shares are owned by institutional investors. 3.9% of Spectrum Brands shares are owned by company insiders. Comparatively, 8.9% of Honest shares are owned by company 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.

Profitability

This table compares Spectrum Brands and Honest’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Spectrum Brands	3.56%	7.29%	4.00%
Honest	1.85%	3.86%	2.82%

Risk and Volatility

Spectrum Brands has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500. Comparatively, Honest has a beta of 2.3, suggesting that its share price is 130% more volatile than the S&P 500.

Summary

Spectrum Brands beats Honest on 8 of the 14 factors compared between the two stocks.

About Spectrum Brands

Spectrum Brands Holdings, Inc. operates as a branded consumer products and home essentials company in North America, Europe, the Middle East, Africa, and Asia-Pacific regions. It operates through three segments: Home and Personal Care; Global Pet Care; and Home and Garden. The Home and Personal Care segment provides home appliances under the Black & Decker, Russell Hobbs, George Foreman, PowerXL, Emeril Legasse, Copper Chef, Toastmaster, Juiceman, Farberware, and Breadman brands; and personal care products under the Remington brand. The Global Pet Care segment provides dog and cat chews, treats, wet and dry foods, dog and cat clean-up and food, training, health and grooming, indoor birds, and small animal food and care products under the Good'n'Fun, DreamBone, GOOD BOY, SmartBones, IAMS, EUKANUBA, Nature's Miracle, FURminator, Dingo, 8IN1, Meowee!, and Wild Harvest brands. This segment also offers aquarium kits, stand-alone tanks, and aquatics equipment and consumables under the Tetra, Marineland, Instant Ocean, GloFish, and OmegaSea brands. The Home and Garden segment provides outdoor insect and weed control solutions, and animal repellents under the Spectracide, Garden Safe, Liquid Fence, and EcoLogic brands; household pest control solutions under the Hot Shot, Black Flag, Real-Kill, Ultra Kill, The Ant Trap, and Rid-A-Bug brand names; household surface cleaning, maintenance, and restoration products, including bottled liquids, mops, wipes, and markers under the Rejuvenate brand name; and personal-use pesticides and insect repellent products under the Cutter and Repel brands. The company sells its products through retailers, e-commerce and online retailers, wholesalers, and distributors. Spectrum Brands Holdings, Inc. was founded in 1906 and is headquartered in Middleton, Wisconsin.

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.