Comparing Grocery Outlet (NASDAQ:GO) and Colgate-Palmolive (NYSE:CL)

Grocery Outlet (NASDAQ:GO) and Colgate-Palmolive (NYSE:CL) are both consumer staples companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, dividends, risk, profitability, analyst recommendations and institutional ownership.

Institutional & Insider Ownership

99.9% of Grocery Outlet shares are held by institutional investors. Comparatively, 80.4% of Colgate-Palmolive shares are held by institutional investors. 4.5% of Grocery Outlet shares are held by insiders. Comparatively, 0.4% of Colgate-Palmolive shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Grocery Outlet and Colgate-Palmolive’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Grocery Outlet	-8.08%	5.69%	1.86%
Colgate-Palmolive	10.04%	386.76%	17.89%

Valuation and Earnings

This table compares Grocery Outlet and Colgate-Palmolive”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Grocery Outlet	$4.69 billion	0.20	-$224.91 million	($3.88)	-2.47
Colgate-Palmolive	$20.38 billion	3.51	$2.13 billion	$2.57	34.79

Colgate-Palmolive has higher revenue and earnings than Grocery Outlet. Grocery Outlet is trading at a lower price-to-earnings ratio than Colgate-Palmolive, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations for Grocery Outlet and Colgate-Palmolive, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Grocery Outlet	2	11	0	0	1.85
Colgate-Palmolive	0	7	12	0	2.63

Grocery Outlet currently has a consensus target price of $10.32, indicating a potential upside of 7.71%. Colgate-Palmolive has a consensus target price of $95.88, indicating a potential upside of 7.25%. Given Grocery Outlet’s higher possible upside, equities analysts plainly believe Grocery Outlet is more favorable than Colgate-Palmolive.

Volatility & Risk

Grocery Outlet has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500. Comparatively, Colgate-Palmolive has a beta of 0.33, indicating that its stock price is 67% less volatile than the S&P 500.

Summary

Colgate-Palmolive beats Grocery Outlet on 10 of the 14 factors compared between the two stocks.

About Grocery Outlet

Grocery Outlet Holding Corp. operates as a retailer of consumables and fresh products sold through independently operated stores in the United States. Its stores offer products in various categories, such as dairy and deli, produce, floral, fresh meat, seafood products, grocery, general merchandise, health and beauty care, frozen food, beer and wine, and ethnic products. The company was founded in 1946 and is headquartered in Emeryville, California.

About Colgate-Palmolive

Colgate-Palmolive Company, together with its subsidiaries, manufactures and sells consumer products in the United States and internationally. It operates through two segments: Oral, Personal and Home Care; and Pet Nutrition. The Oral, Personal and Home Care segment offers toothpaste, toothbrushes, mouthwash, bar and liquid hand soaps, shower gels, shampoos, conditioners, deodorants and antiperspirants, skin health products, dishwashing detergents, fabric conditioners, household cleaners, and other related items. This segment markets and sells its products under various brands, which include Colgate, Darlie, elmex, hello, meridol, Sorriso, Tom's of Maine, Irish Spring, Palmolive, Protex, Sanex, Softsoap, Lady Speed Stick, Speed Stick, EltaMD, Filorga, PCA SKIN, Ajax, Axion, Fabuloso, Murphy, Suavitel, and Soupline to a range of traditional and eCommerce retailers, wholesalers, and distributors. It includes pharmaceutical products for dentists and other oral health professionals. Its Pet Nutrition segment offers pet nutrition products for everyday nutritional needs under the Hill's Science Diet brand; and a range of therapeutic pet products to help nutritionally support dogs and cats in different stages of health under the Hill's Prescription Diet brand. This segment markets and sells its products through pet supply retailers, veterinarians, and eCommerce retailers. Colgate-Palmolive Company was founded in 1806 and is headquartered in New York, New York.