Comparing Bath & Body Works (NYSE:BBWI) and Star Group (NYSE:SGU)

Bath & Body Works (NYSE:BBWI) and Star Group (NYSE:SGU) are both retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, institutional ownership, risk and earnings.

Profitability

This table compares Bath & Body Works and Star Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bath & Body Works	12.43%	-44.03%	14.45%
Star Group	1.99%	12.01%	3.82%

Volatility & Risk

Bath & Body Works has a beta of 1.83, suggesting that its share price is 83% more volatile than the S&P 500. Comparatively, Star Group has a beta of 0.46, suggesting that its share price is 54% less volatile than the S&P 500.

Insider and Institutional Ownership

95.1% of Bath & Body Works shares are owned by institutional investors. Comparatively, 40.4% of Star Group shares are owned by institutional investors. 0.3% of Bath & Body Works shares are owned by company insiders. Comparatively, 20.4% of Star Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Bath & Body Works pays an annual dividend of $0.80 per share and has a dividend yield of 2.1%. Star Group pays an annual dividend of $0.69 per share and has a dividend yield of 5.9%. Bath & Body Works pays out 19.5% of its earnings in the form of a dividend. Star Group pays out 121.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Star Group has raised its dividend for 12 consecutive years. Star Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current ratings for Bath & Body Works and Star Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bath & Body Works	1	6	9	0	2.50
Star Group	0	0	0	0	0.00

Bath & Body Works presently has a consensus target price of $42.50, indicating a potential upside of 9.99%. Given Bath & Body Works’ stronger consensus rating and higher probable upside, equities analysts clearly believe Bath & Body Works is more favorable than Star Group.

Earnings and Valuation

This table compares Bath & Body Works and Star Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bath & Body Works	$7.43 billion	1.13	$878.00 million	$4.10	9.42
Star Group	$1.77 billion	0.23	$35.22 million	$0.57	20.35

Bath & Body Works has higher revenue and earnings than Star Group. Bath & Body Works is trading at a lower price-to-earnings ratio than Star Group, indicating that it is currently the more affordable of the two stocks.

Summary

Bath & Body Works beats Star Group on 12 of the 17 factors compared between the two stocks.

About Bath & Body Works

Bath & Body Works, Inc. operates a specialty retailer of home fragrance, body care, and soaps and sanitizer products. It sells its products under the Bath & Body Works, White Barn, and other brand names through retail stores and e-commerce sites located in the United States and Canada, as well as through international stores operated by partners under franchise, license, and wholesale arrangements. The company was formerly known as L Brands, Inc. and changed its name to Bath & Body Works, Inc. in August 2021. Bath & Body Works, Inc. was founded in 1963 and is headquartered in Columbus, Ohio.

About Star Group

Star Group, L.P., together with its subsidiaries, provides home heating oil and propane products and services to residential and commercial customers in the United States. It offers gasoline and diesel fuel; and installs, maintain, and repairs heating and air conditioning equipment. As of September 30, 2023, the company served approximately 402,200 full service residential and commercial home heating oil and propane customers and 52,400 customers on a delivery only basis. It also sells gasoline and diesel fuel to approximately 26,600 customers. The company was formerly known as Star Gas Partners, L.P. and changed its name to Star Group, L.P. in October 2017. Star Group, L.P. was incorporated in 1995 and is based in Stamford, Connecticut.