Reviewing Valvoline (NYSE:VVV) & Boot Barn (NYSE:BOOT)

Boot Barn (NYSE:BOOT) and Valvoline (NYSE:VVV) are both mid-cap consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, profitability, valuation and risk.

Dividends

Boot Barn pays an annual dividend of $0.50 per share and has a dividend yield of 0.4%. Valvoline pays an annual dividend of $0.12 per share and has a dividend yield of 0.4%. Boot Barn pays out 6.3% of its earnings in the form of a dividend. Valvoline pays out 15.0% 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.

Valuation and Earnings

This table compares Boot Barn and Valvoline”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Boot Barn	$2.34 billion	1.59	$225.88 million	$7.90	15.58
Valvoline	$1.96 billion	1.74	$210.70 million	$0.80	33.51

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

Analyst Recommendations

This is a breakdown of current ratings and target prices for Boot Barn and Valvoline, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Boot Barn	0	1	11	1	3.00
Valvoline	0	5	12	0	2.71

Boot Barn currently has a consensus target price of $219.55, indicating a potential upside of 78.42%. Valvoline has a consensus target price of $43.06, indicating a potential upside of 60.64%. Given Boot Barn’s stronger consensus rating and higher probable upside, research analysts plainly believe Boot Barn is more favorable than Valvoline.

Profitability

This table compares Boot Barn and Valvoline’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Boot Barn	10.35%	18.78%	10.03%
Valvoline	5.17%	65.12%	7.11%

Institutional and Insider Ownership

96.1% of Valvoline shares are held by institutional investors. 0.7% of Boot Barn shares are held by insiders. Comparatively, 0.7% of Valvoline shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Boot Barn has a beta of 1.7, meaning that its share price is 70% more volatile than the S&P 500. Comparatively, Valvoline has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500.

Summary

Boot Barn beats Valvoline on 11 of the 17 factors compared between the two stocks.

About Boot Barn

Boot Barn Holdings, Inc., a lifestyle retail chain, operates specialty retail stores in the United States. The company's specialty retail stores offer western and work-related footwear, apparel, and accessories for men, women, and kids. It offers boots, shirts, jackets, hats, belts and belt buckles, handbags, western-style jewelry, rugged footwear, outerwear, overalls, denim, and flame-resistant and high-visibility clothing. The company also provides gifts and home merchandise. The company also sells its products through e-commerce websites, including bootbarn.com; sheplers.com; and countryoutfitter.com. The company was formerly known as WW Top Investment Corporation and changed its name to Boot Barn Holdings, Inc. in June 2014. Boot Barn Holdings, Inc. was founded in 1978 and is based in Irvine, California.

About Valvoline

Valvoline Inc. engages in the operation and franchising of vehicle service centers and retail stores in the United States and Canada. The company, through its service centers, provides fluid exchange for motor oil, transmission and differential fluid, and coolant; parts replacement for batteries, filters, wiper blades, and belts; and safety services, such as tire inflation and rotation, bulbs, and safety checks. It offers its services for passenger cars, hybrid and battery electric vehicles, and light and medium duty vehicles. The company was founded in 1866 and is headquartered in Lexington, Kentucky.