O’Reilly Automotive (NASDAQ:ORLY – Get Free Report) and Home Depot (NYSE:HD – Get Free Report) are both large-cap consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, dividends, risk, profitability and earnings.
Volatility and Risk
O’Reilly Automotive has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500. Comparatively, Home Depot has a beta of 0.95, indicating that its share price is 5% less volatile than the S&P 500.
Earnings and Valuation
This table compares O’Reilly Automotive and Home Depot”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| O’Reilly Automotive | $17.78 billion | 4.00 | $2.54 billion | $3.14 | 27.99 |
| Home Depot | $164.68 billion | 1.95 | $14.16 billion | $14.29 | 22.47 |
Home Depot has higher revenue and earnings than O’Reilly Automotive. Home Depot is trading at a lower price-to-earnings ratio than O’Reilly Automotive, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares O’Reilly Automotive and Home Depot’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| O’Reilly Automotive | 14.27% | -232.45% | 15.79% |
| Home Depot | 8.41% | 106.42% | 13.76% |
Analyst Ratings
This is a summary of current ratings and price targets for O’Reilly Automotive and Home Depot, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| O’Reilly Automotive | 0 | 3 | 14 | 1 | 2.89 |
| Home Depot | 1 | 13 | 18 | 0 | 2.53 |
O’Reilly Automotive presently has a consensus price target of $107.24, indicating a potential upside of 22.00%. Home Depot has a consensus price target of $375.54, indicating a potential upside of 16.93%. Given O’Reilly Automotive’s stronger consensus rating and higher probable upside, equities research analysts clearly believe O’Reilly Automotive is more favorable than Home Depot.
Insider and Institutional Ownership
85.0% of O’Reilly Automotive shares are held by institutional investors. Comparatively, 70.9% of Home Depot shares are held by institutional investors. 0.8% of O’Reilly Automotive shares are held by company insiders. Comparatively, 0.1% of Home Depot shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Summary
O’Reilly Automotive beats Home Depot on 9 of the 15 factors compared between the two stocks.
About O’Reilly Automotive
O’Reilly Automotive, Inc., together with its subsidiaries, operates as a retailer and supplier of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States, Puerto Rico, and Mexico. The company provides new and remanufactured automotive hard parts and maintenance items, such as alternators, batteries, brake system components, belts, chassis parts, driveline parts, engine parts, fuel pumps, hoses, starters, temperature control, water pumps, antifreeze, appearance products, engine additives, filters, fluids, lighting products, and oil and wiper blades; and accessories, including floor mats, seat covers, and truck accessories. It also offers auto body paint and related materials, automotive tools, and professional service provider service equipment. In addition, the company provide enhanced services and programs comprising used oil, oil filter, and battery recycling; battery, wiper, and bulb replacement; battery diagnostic testing; electrical and module testing; check engine light code extraction; loaner tool program; drum and rotor resurfacing; custom hydraulic hoses; and professional paint shop mixing and related materials. Further, it offers do-it-yourself and professional service for domestic and imported automobiles, vans, and trucks. The company was founded in 1957 and is headquartered in Springfield, Missouri.
About Home Depot
The Home Depot, Inc. operates as a home improvement retailer in the United States and internationally. It sells various building materials, home improvement products, lawn and garden products, and décor products, as well as facilities maintenance, repair, and operations products. The company also offers installation services for flooring, water heaters, bath, garage doors, cabinets, cabinet makeovers, countertops, sheds, furnaces and central air systems, and windows. In addition, it provides tool and equipment rental services. The company primarily serves homeowners; and professional renovators/remodelers, general contractors, maintenance professionals, handymen, property managers, and building service contractors, as well as specialty tradesmen, such as electricians, plumbers, and painters. It sells its products through websites, including homedepot.com; homedepot.ca and homedepot.com.mx; blinds.com, justblinds.com, and americanblinds.com for custom window coverings; thecompanystore.com, an online site for textiles and décor products; hdsupply.com for maintenance, repair, and operations (MRO) products and related services; and The Home Depot stores. The Home Depot, Inc. was incorporated in 1978 and is headquartered in Atlanta, Georgia.
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