Shoe Carnival (NASDAQ:SHOE) versus AutoNation (NYSE:AN) Critical Comparison

Shoe Carnival (NASDAQ:SHOE) and AutoNation (NYSE:AN) are both consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, dividends, analyst recommendations and valuation.

Volatility & Risk

Shoe Carnival has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500. Comparatively, AutoNation has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500.

Profitability

This table compares Shoe Carnival and AutoNation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shoe Carnival	2.20%	5.32%	3.08%
AutoNation	2.63%	31.15%	4.78%

Institutional and Insider Ownership

66.1% of Shoe Carnival shares are owned by institutional investors. Comparatively, 94.6% of AutoNation shares are owned by institutional investors. 33.6% of Shoe Carnival shares are owned by insiders. Comparatively, 1.4% of AutoNation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Shoe Carnival and AutoNation, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shoe Carnival	1	1	0	1	2.33
AutoNation	2	3	8	0	2.46

Shoe Carnival currently has a consensus target price of $22.00, suggesting a potential upside of 50.07%. AutoNation has a consensus target price of $230.00, suggesting a potential upside of 28.46%. Given Shoe Carnival’s higher possible upside, equities research analysts clearly believe Shoe Carnival is more favorable than AutoNation.

Earnings and Valuation

This table compares Shoe Carnival and AutoNation”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shoe Carnival	$1.11 billion	0.36	$52.27 million	$0.88	16.66
AutoNation	$27.45 billion	0.22	$649.10 million	$20.81	8.60

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

Summary

AutoNation beats Shoe Carnival on 9 of the 15 factors compared between the two stocks.

About Shoe Carnival

Shoe Carnival, Inc., together with its subsidiaries, operates as a family footwear retailer in the United States. The company offers range of dress, casual, work, and athletic shoes, as well as sandals and boots for men, women, and children; and various accessories. The company also operates stores, and sells its products through online shopping at shoecarnival.com, as well as through mobile app. Shoe Carnival, Inc. was founded in 1978 and is headquartered in Evansville, Indiana.

About AutoNation

AutoNation, Inc., through its subsidiaries, operates as an automotive retailer in the United States. The company operates through three segments: Domestic, Import, and Premium Luxury. It offers a range of automotive products and services, including new and used vehicles; and parts and services, such as automotive repair and maintenance, and wholesale parts and collision services. The company also provides automotive finance and insurance products comprising vehicle services and other protection products; and indirect financing for vehicles, as well as arranges finance for vehicle purchases through third-party finance sources. It owns and operates new vehicle franchises from stores located primarily in metropolitan markets in the Sunbelt region, as well as AutoNation-branded collision centers, AutoNation USA used vehicle stores, AutoNation-branded automotive auction operations, and parts distribution centers. The company was formerly known as Republic Industries, Inc. and changed its name to AutoNation, Inc. in 1999. AutoNation, Inc. was incorporated in 1980 and is headquartered in Fort Lauderdale, Florida.