Critical Contrast: Petco Health and Wellness (NASDAQ:WOOF) & Asbury Automotive Group (NYSE:ABG)

Petco Health and Wellness (NASDAQ:WOOF) and Asbury Automotive Group (NYSE:ABG) are both consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, institutional ownership and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent ratings for Petco Health and Wellness and Asbury Automotive Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Petco Health and Wellness	2	5	1	1	2.11
Asbury Automotive Group	1	6	2	0	2.11

Petco Health and Wellness currently has a consensus target price of $3.42, indicating a potential upside of 54.05%. Asbury Automotive Group has a consensus target price of $223.50, indicating a potential upside of 31.90%. Given Petco Health and Wellness’ higher possible upside, equities analysts plainly believe Petco Health and Wellness is more favorable than Asbury Automotive Group.

Profitability

This table compares Petco Health and Wellness and Asbury Automotive Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Petco Health and Wellness	0.51%	3.44%	0.78%
Asbury Automotive Group	2.83%	12.72%	4.31%

Volatility & Risk

Petco Health and Wellness has a beta of 1.59, suggesting that its stock price is 59% more volatile than the S&P 500. Comparatively, Asbury Automotive Group has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500.

Valuation & Earnings

This table compares Petco Health and Wellness and Asbury Automotive Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Petco Health and Wellness	$5.96 billion	0.12	$9.07 million	$0.10	22.20
Asbury Automotive Group	$18.00 billion	0.17	$492.00 million	$26.74	6.34

Asbury Automotive Group has higher revenue and earnings than Petco Health and Wellness. Asbury Automotive Group is trading at a lower price-to-earnings ratio than Petco Health and Wellness, indicating that it is currently the more affordable of the two stocks.

Summary

Asbury Automotive Group beats Petco Health and Wellness on 8 of the 12 factors compared between the two stocks.

About Petco Health and Wellness

Petco Health and Wellness Company, Inc., operates as a health and wellness company, focuses on enhancing the lives of pets, pet parents, and its Petco partners in the United States, Mexico, and Puerto Rico. The company provides veterinary care, grooming, training, tele-health, and Vital Care and pet health insurance services, as well as veterinary services through Vetco mobile clinics. It also offers pet consumables, supplies, and services through its petco.com, petcoach.co, petinsurancequotes.com, and pupbox.com websites. The company offers its products under the WholeHearted, Reddy, and Well & Good brands. Petco Health and Wellness Company, Inc. was founded in 1965 and is headquartered in San Diego, California.

About Asbury Automotive Group

Asbury Automotive Group, Inc., together with its subsidiaries, operates as an automotive retailer in the United States. It offers a range of automotive products and services, including new and used vehicles; and vehicle repair and maintenance services, replacement parts, and collision repair services. The company also provides finance and insurance products, including arranging vehicle financing through third parties; and aftermarket products, such as extended service contracts, guaranteed asset protection debt cancellation, prepaid maintenance, and disability and accident insurance. Asbury Automotive Group, Inc. was founded in 1996 and is based in Duluth, Georgia.