LKQ (NASDAQ:LKQ) & Pool (NASDAQ:POOL) Head to Head Comparison

LKQ (NASDAQ:LKQ) and Pool (NASDAQ:POOL) are both mid-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, analyst recommendations, earnings, valuation, dividends and institutional ownership.

Insider and Institutional Ownership

95.6% of LKQ shares are held by institutional investors. Comparatively, 99.0% of Pool shares are held by institutional investors. 0.4% of LKQ shares are held by insiders. Comparatively, 3.0% of Pool shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares LKQ and Pool”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LKQ	$13.65 billion	0.42	$607.00 million	$2.02	11.11
Pool	$5.29 billion	1.28	$406.40 million	$10.87	17.08

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

Profitability

This table compares LKQ and Pool’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LKQ	3.71%	11.65%	4.93%
Pool	7.40%	32.74%	10.91%

Dividends

LKQ pays an annual dividend of $1.20 per share and has a dividend yield of 5.3%. Pool pays an annual dividend of $5.20 per share and has a dividend yield of 2.8%. LKQ pays out 59.4% of its earnings in the form of a dividend. Pool pays out 47.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. LKQ has increased its dividend for 3 consecutive years and Pool has increased its dividend for 15 consecutive years.

Volatility and Risk

LKQ has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500. Comparatively, Pool has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for LKQ and Pool, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LKQ	0	3	3	0	2.50
Pool	2	6	5	0	2.23

LKQ currently has a consensus target price of $33.25, suggesting a potential upside of 48.11%. Pool has a consensus target price of $235.67, suggesting a potential upside of 26.90%. Given LKQ’s stronger consensus rating and higher possible upside, equities analysts plainly believe LKQ is more favorable than Pool.

Summary

Pool beats LKQ on 12 of the 17 factors compared between the two stocks.

About LKQ

LKQ Corporation engages in the distribution of replacement parts, components, and systems used in the repair and maintenance of vehicles and specialty vehicle aftermarket products and accessories. It operates through four segments: Wholesale-North America, Europe, Specialty, and Self Service. The company distributes bumper covers, automotive body panels, and lights, as well as mechanical automotive parts and accessories; salvage products, including mechanical and collision parts comprising engines; transmissions; door assemblies; sheet metal products, such as trunk lids, fenders, and hoods; lights and bumper assemblies; scrap metal and other materials to metals recyclers; and brake pads, discs and sensors, clutches, steering and suspension products, filters, and oil and automotive fluids, as well as electrical products, including spark plugs and batteries. In addition, the company distributes recreational vehicle appliances and air conditioners, towing hitches, truck bed covers, vehicle protection products, marine electronics, cargo management products, wheels, tires, and suspension products. It serves collision and mechanical repair shops, and new and used car dealerships, as well as retail customers. The company operates in the United States, Canada, the United Kingdom, Germany, Belgium, the Netherlands, Luxembourg, Italy, the Czech Republic, Austria, Poland, Slovakia, Taiwan, and other European countries. LKQ Corporation was incorporated in 1998 and is headquartered in Chicago, Illinois.

About Pool

Pool Corporation distributes swimming pool supplies, equipment, and related leisure products in the United States and internationally. The company offers maintenance products, including chemicals, supplies, and pool accessories; repair and replacement parts for pool equipment, such as cleaners, filters, heaters, pumps, and lights; and building materials, such as concrete, plumbing and electrical components, functional and decorative pool surfaces, decking materials, tiles, hardscapes, and natural stones for pool installations and remodeling. It also provides pool equipment and components for new pool construction and the remodeling of existing pools; irrigation and related products, such as irrigation system components, and professional turf care equipment and supplies; commercial products, including heaters, safety equipment, commercial decking equipment, and commercial pumps and filters. In addition, the company offers fiberglass pools, and hot tubs and packaged pool kits comprising walls, liners, braces, and coping for in-ground and above-ground pools; and other pool construction and recreational products comprising discretionary recreational and related outdoor living products, such as grills and components for outdoor kitchens. It serves swimming pool remodelers and builders; specialty retailers that sell swimming pool supplies; swimming pool repair and service businesses; irrigation construction and landscape maintenance contractors; and commercial pool operators and pool contractors. Pool Corporation was incorporated in 1993 and is headquartered in Covington, Louisiana.