Analyzing Regis (RGS) & UniFirst (UNF)

Regis (NYSE: RGS) and UniFirst (NYSE:UNF) are both retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, earnings, valuation, profitability and dividends.

Profitability

This table compares Regis and UniFirst’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Regis 0.39% 5.24% 2.80%
UniFirst 6.79% 7.95% 6.42%

Institutional & Insider Ownership

93.7% of Regis shares are held by institutional investors. Comparatively, 71.8% of UniFirst shares are held by institutional investors. 24.0% of Regis shares are held by company insiders. Comparatively, 1.0% of UniFirst shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility and Risk

Regis has a beta of 1.38, indicating that its stock price is 38% more volatile than the S&P 500. Comparatively, UniFirst has a beta of 0.63, indicating that its stock price is 37% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Regis and UniFirst, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Regis 0 0 1 0 3.00
UniFirst 0 2 1 0 2.33

Regis currently has a consensus target price of $18.00, indicating a potential upside of 7.59%. UniFirst has a consensus target price of $183.00, indicating a potential upside of 1.10%. Given Regis’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Regis is more favorable than UniFirst.

Dividends

UniFirst pays an annual dividend of $0.45 per share and has a dividend yield of 0.2%. Regis does not pay a dividend. UniFirst pays out 8.5% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Regis and UniFirst’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Regis $1.69 billion 0.46 -$16.14 million $0.06 278.83
UniFirst $1.59 billion 2.31 $70.19 million $5.28 34.28

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

Summary

Regis beats UniFirst on 8 of the 15 factors compared between the two stocks.

About Regis

Regis Corporation owns, operates, and franchises hairstyling and hair care salons. The company operates through four segments: North American Value, North American Franchise, North American Premium, and International. Its salons offer haircutting and styling, including shampooing and conditioning; custom styling, cutting, and hair coloring, as well as professional hair care products; and other services. The company operates its salons under the SmartStyle, Supercuts, MasterCuts, Regis Salons, Cost Cutters, Hair Masters, First Choice Haircutters, Magicuts, and Sassoon names in enclosed mall shopping centers, strip shopping centers, Walmart Supercenters, department stores, mass merchants, and high-street locations. As of January 08, 2018, it owned, franchised, or held ownership interests in 8,944 locations worldwide. The company, through its 54.6% interest in Empire Education Group, Inc., operates accredited cosmetology schools under the Empire Beauty School brand. It owns and operates 88 cosmetology schools in the United States. Regis Corporation was founded in 1954 and is headquartered in Edina, Minnesota.

About UniFirst

UniFirst Corporation provides workplace uniforms and protective work wear clothing in the United States, Canada, and Europe. It operates through US Rental and Cleaning, Canadian Rental and Cleaning, Manufacturing, Specialty Garments Rental and Cleaning, and First Aid segments. The company designs, manufactures, personalizes, rents, cleans, delivers, and sells a range of uniforms and protective clothing, including shirts, pants, jackets, coveralls, lab coats, smocks, and aprons; and specialized protective wear, such as flame resistant and high visibility garments. It also rents and sells industrial wiping products, floor mats, facility service products, and dry and wet mops; restroom and cleaning supplies comprising air fresheners, paper products, and hand soaps; and other textile products. In addition, the company provides first aid cabinet services and other safety supplies; decontaminates and cleans work clothes, and other items that might expose to radioactive materials; and services special cleanroom protective wear and facilities. Further, it offers a range of garment service options, including full-service rental programs in which garments are cleaned and serviced; lease programs in which garments are cleaned and maintained by individual employees; and purchase programs to buy garments and related items directly. The company serves automobile service centers and dealers, delivery services, food and general merchandise retailers, food processors and service operations, light manufacturers, maintenance facilities, restaurants, service companies, soft and durable goods wholesalers, transportation companies, government agencies, research and development laboratories, high technology companies, and utilities operating nuclear reactors, as well as others who require employee clothing for image, identification, protection, or utility purposes. UniFirst Corporation was founded in 1936 and is based in Wilmington, Massachusetts.

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