Contrasting RH (NYSE:RH) & Asbury Automotive Group (NYSE:ABG)

Asbury Automotive Group (NYSE:ABG) and RH (NYSE:RH) are both mid-cap consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, valuation, profitability, institutional ownership, dividends and analyst recommendations.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Asbury Automotive Group	2.66%	11.94%	4.08%
RH	3.23%	132.79%	1.63%

Volatility and Risk

Asbury Automotive Group has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500. Comparatively, RH has a beta of 1.91, indicating that its stock price is 91% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Asbury Automotive Group and RH, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Asbury Automotive Group	2	5	3	0	2.10
RH	3	9	7	0	2.21

Asbury Automotive Group currently has a consensus target price of $220.88, suggesting a potential upside of 11.79%. RH has a consensus target price of $163.79, suggesting a potential upside of 11.76%. Given Asbury Automotive Group’s higher probable upside, equities research analysts clearly believe Asbury Automotive Group is more favorable than RH.

Valuation & Earnings

This table compares Asbury Automotive Group and RH”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Asbury Automotive Group	$18.00 billion	0.20	$492.00 million	$25.06	7.88
RH	$3.44 billion	0.81	$124.79 million	$5.62	26.08

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

Insider and Institutional Ownership

90.2% of RH shares are owned by institutional investors. 0.7% of Asbury Automotive Group shares are owned by insiders. Comparatively, 26.9% of RH shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

RH beats Asbury Automotive Group on 9 of the 14 factors compared between the two stocks.

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.

About RH

RH, together with its subsidiaries, operates as a retailer in the home furnishings market. The company offers products in various categories, including furniture, lighting, textiles, bathware, décor, outdoor and garden, baby, child, and teen furnishings. It provides its products through rh.com, rhbabyandchild.com, rhteen.com, rhmodern.com, and waterworks.com online channels, as well as operates RH Galleries, RH outlet stores, RH Guesthouse, and Waterworks showrooms in the United States, Canada, the United Kingdom, and Germany. The company was formerly known as Restoration Hardware Holdings, Inc. and changed its name to RH in January 2017. RH was incorporated in 2011 and is headquartered in Corte Madera, California.