Critical Contrast: Asbury Automotive Group (NYSE:ABG) vs. O’Reilly Automotive (NASDAQ:ORLY)

O’Reilly Automotive (NASDAQ:ORLY) and Asbury Automotive Group (NYSE:ABG) are both consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, earnings, risk and valuation.

Valuation & Earnings

This table compares O’Reilly Automotive and Asbury Automotive Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
O’Reilly Automotive	$18.99 billion	3.83	$2.54 billion	$3.26	27.57
Asbury Automotive Group	$18.00 billion	0.20	$492.00 million	$25.06	8.10

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

Institutional & Insider Ownership

85.0% of O’Reilly Automotive shares are held by institutional investors. 0.8% of O’Reilly Automotive shares are held by insiders. Comparatively, 0.7% of Asbury Automotive Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
O’Reilly Automotive	14.27%	-188.24%	15.83%
Asbury Automotive Group	2.66%	11.85%	4.09%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for O’Reilly Automotive and Asbury Automotive Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
O’Reilly Automotive	0	3	16	1	2.90
Asbury Automotive Group	2	5	3	0	2.10

O’Reilly Automotive presently has a consensus price target of $108.00, suggesting a potential upside of 20.15%. Asbury Automotive Group has a consensus price target of $220.88, suggesting a potential upside of 8.86%. Given O’Reilly Automotive’s stronger consensus rating and higher possible upside, equities research analysts plainly believe O’Reilly Automotive is more favorable than Asbury Automotive Group.

Risk & Volatility

O’Reilly Automotive has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500. Comparatively, Asbury Automotive Group has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500.

Summary

O’Reilly Automotive beats Asbury Automotive Group on 12 of the 15 factors compared between the two stocks.

About O’Reilly Automotive

O’Reilly Automotive, Inc., together with its subsidiaries, operates as a retailer and supplier of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States, Puerto Rico, and Mexico. The company provides new and remanufactured automotive hard parts and maintenance items, such as alternators, batteries, brake system components, belts, chassis parts, driveline parts, engine parts, fuel pumps, hoses, starters, temperature control, water pumps, antifreeze, appearance products, engine additives, filters, fluids, lighting products, and oil and wiper blades; and accessories, including floor mats, seat covers, and truck accessories. It also offers auto body paint and related materials, automotive tools, and professional service provider service equipment. In addition, the company provide enhanced services and programs comprising used oil, oil filter, and battery recycling; battery, wiper, and bulb replacement; battery diagnostic testing; electrical and module testing; check engine light code extraction; loaner tool program; drum and rotor resurfacing; custom hydraulic hoses; and professional paint shop mixing and related materials. Further, it offers do-it-yourself and professional service for domestic and imported automobiles, vans, and trucks. The company was founded in 1957 and is headquartered in Springfield, Missouri.

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.