Ulta Beauty (NASDAQ:ULTA) and Five Below (NASDAQ:FIVE) Head to Head Comparison

Ulta Beauty (NASDAQ:ULTA) and Five Below (NASDAQ:FIVE) are both retail/wholesale companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, profitability, earnings, risk, institutional ownership and valuation.

Profitability

This table compares Ulta Beauty and Five Below’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ulta Beauty	10.45%	49.73%	20.15%
Five Below	6.52%	17.00%	6.89%

Risk and Volatility

Ulta Beauty has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500. Comparatively, Five Below has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for Ulta Beauty and Five Below, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ulta Beauty	1	11	13	0	2.48
Five Below	1	14	6	0	2.24

Ulta Beauty currently has a consensus price target of $462.22, suggesting a potential downside of 2.45%. Five Below has a consensus price target of $112.40, suggesting a potential downside of 8.88%. Given Ulta Beauty’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Ulta Beauty is more favorable than Five Below.

Institutional and Insider Ownership

90.4% of Ulta Beauty shares are held by institutional investors. 0.2% of Ulta Beauty shares are held by company insiders. Comparatively, 1.9% of Five Below shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Ulta Beauty and Five Below”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ulta Beauty	$11.30 billion	1.89	$1.20 billion	$25.60	18.51
Five Below	$3.88 billion	1.75	$253.61 million	$4.77	25.86

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

Summary

Ulta Beauty beats Five Below on 12 of the 14 factors compared between the two stocks.

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.

About Five Below

Five Below, Inc. operates as a specialty value retailer in the United States. The company offers range of accessories, which includes novelty socks, sunglasses, jewelry, scarves, gloves, hair accessories, athletic tops and bottoms, and t-shirts, as well as nail polish, lip gloss, fragrance, and branded cosmetics; and personalized living space products, such as lamps, posters, frames, fleece blankets, plush items, pillows, candles, incense, lighting, novelty décor, accent furniture, and related items, as well as provides storage options. It provides assortment of sports balls, team sports merchandise, and fitness accessories comprising hand weights, jump ropes, and gym balls; various games, such as board games, puzzles, collectibles, and toys, including remote control; and summer season sports, which includes pool, beach, and outdoor toys, as well as games and accessories. In addition, the company offers accessories for cell phones, tablets, audio, and computers, as well as cases, chargers, headphones, and other related items; and media products including books, video games, and DVDs. It also provides assortment of craft activity kits, and arts and crafts supplies, such as crayons, markers, and stickers; and school products comprising backpacks, fashion notebooks and journals, novelty pens and pencils, and locker accessories. Further, the company offers party products, which includes party goods, decorations, gag gifts, and greeting cards, as well as every day and special occasion merchandise; assortment of classic and novelty candy bars, movie-size box candy, seasonal-related candy, and gum and snack food products, as well as sells chilled drinks through coolers; and provides seasonally specific items used to celebrate and decorate for events. The company was formerly known as Cheap Holdings, Inc. and changed its name to Five Below, Inc. in August 2002. Five Below, Inc. was incorporated in 2002 and is headquartered in Philadelphia, Pennsylvania.