Analyzing Betterware de Mexico SAPI de C (NYSE:BWMX) and Honest (NASDAQ:HNST)

Honest (NASDAQ:HNST) and Betterware de Mexico SAPI de C (NYSE:BWMX) are both small-cap consumer staples companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, institutional ownership, risk, profitability, valuation, analyst recommendations and earnings.

Analyst Ratings

This is a breakdown of current recommendations for Honest and Betterware de Mexico SAPI de C, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Honest	1	5	2	1	2.33
Betterware de Mexico SAPI de C	0	2	0	1	2.67

Honest currently has a consensus target price of $4.84, indicating a potential downside of 4.54%. Given Honest’s higher possible upside, analysts clearly believe Honest is more favorable than Betterware de Mexico SAPI de C.

Institutional & Insider Ownership

45.5% of Honest shares are owned by institutional investors. Comparatively, 12.7% of Betterware de Mexico SAPI de C shares are owned by institutional investors. 9.4% of Honest shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Honest and Betterware de Mexico SAPI de C’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Honest	-3.56%	4.31%	3.33%
Betterware de Mexico SAPI de C	8.35%	77.89%	11.28%

Volatility and Risk

Honest has a beta of 2.32, meaning that its stock price is 132% more volatile than the S&P 500. Comparatively, Betterware de Mexico SAPI de C has a beta of 0.99, meaning that its stock price is 1% less volatile than the S&P 500.

Earnings & Valuation

This table compares Honest and Betterware de Mexico SAPI de C”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Honest	$371.32 million	1.50	-$15.69 million	($0.11)	-46.09
Betterware de Mexico SAPI de C	$744.00 million	0.87	$55.37 million	$1.83	8.99

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

Summary

Betterware de Mexico SAPI de C beats Honest on 8 of the 14 factors compared between the two stocks.

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.

About Betterware de Mexico SAPI de C

Betterware de Mexico, S.A.B. de C.V. operates as a direct-to-consumer company in Mexico. The company focuses on the home organization segment with a product portfolio, including home solutions, kitchen and food preservation, technology and mobility, and other categories. It serves approximately 3 million households through distributors and associates in approximately 800 communities throughout Mexico. The company was formerly known as Betterware de México, S.A.P.I. de C.V. Betterware de Mexico, S.A.B. de C.V. was founded in 1995 and is based in Zapopan, Mexico. Betterware de Mexico, S.A.B. de C.V. is a subsidiary of Campalier, S.A. de C.V.