Financial Survey: AutoZone (AZO) and Asbury Automotive Group (ABG)
AutoZone (NYSE: AZO) and Asbury Automotive Group (NYSE:ABG) are both retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, analyst recommendations, profitability, earnings and risk.
Insider and Institutional Ownership
96.1% of AutoZone shares are held by institutional investors. Comparatively, 99.9% of Asbury Automotive Group shares are held by institutional investors. 2.6% of AutoZone shares are held by company insiders. Comparatively, 11.9% of Asbury Automotive Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares AutoZone and Asbury Automotive Group’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|AutoZone||$10.77 billion||1.39||$2.39 billion||$43.18||12.37|
|Asbury Automotive Group||$6.53 billion||0.17||$326.10 million||$7.68||6.80|
AutoZone has higher revenue and earnings than Asbury Automotive Group. Asbury Automotive Group is trading at a lower price-to-earnings ratio than AutoZone, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
AutoZone has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500. Comparatively, Asbury Automotive Group has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500.
This is a breakdown of current ratings for AutoZone and Asbury Automotive Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Asbury Automotive Group||1||4||0||0||1.80|
AutoZone presently has a consensus price target of $763.05, indicating a potential upside of 42.91%. Asbury Automotive Group has a consensus price target of $56.75, indicating a potential upside of 8.61%. Given AutoZone’s stronger consensus rating and higher possible upside, equities research analysts clearly believe AutoZone is more favorable than Asbury Automotive Group.
This table compares AutoZone and Asbury Automotive Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Asbury Automotive Group||1.95%||41.52%||5.37%|
AutoZone beats Asbury Automotive Group on 10 of the 14 factors compared between the two stocks.
AutoZone Company Profile
Autozone, Inc. is a retailer and distributor of automotive replacement parts and accessories in the United States. The Company operates through the Auto Parts Locations segment. The Auto Parts Locations segment is a retailer and distributor of automotive parts and accessories. As of August 27, 2016, the Company operated through 5,814 locations in the United States, Puerto Rico, Mexico and Brazil. The Company’s stores carry product lines for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories and non-automotive products. The Company’s other operating segments include ALLDATA, which produces, sells and maintains diagnostic and repair information software used in the automotive repair industry; E-commerce, which includes direct sales to customers through www.autozone.com, and AutoAnything, which includes direct sales to customers through www.autoanything.com.
Asbury Automotive Group Company Profile
Asbury Automotive Group, Inc. is an automotive retailer in the United States. As of December 31, 2016, the Company owned and operated 93 new vehicle franchises, representing 28 brands of automobiles at 77 dealership locations, and 23 collision centers in the United States. In addition, as of December 31, 2016, it owned and operated two standalone used vehicle stores in Florida. Its stores offer automotive products and services, including new and used vehicles; parts and service, including vehicle repair and maintenance services, replacement parts, and collision repair services; and finance and insurance products, including arranging vehicle financing through third parties and aftermarket products, such as extended service contracts, guaranteed asset protection (GAP) insurance, prepaid maintenance, and credit life and disability insurance. Its new vehicle revenues include new vehicle sales and lease transactions arranged by dealerships with third-party financial institutions.
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