Pep Boys – Manny Moe & Jack (NYSE: PBY) and AutoNation (NYSE:AN) are both cyclical consumer goods & services companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, earnings, profitabiliy, analyst recommendations, risk, institutional ownership and valuation.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Pep Boys – Manny Moe & Jack and AutoNation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pep Boys – Manny Moe & Jack 0 0 0 0 N/A
AutoNation 0 8 3 0 2.27

AutoNation has a consensus target price of $46.56, suggesting a potential upside of 15.29%. Given AutoNation’s higher possible upside, analysts clearly believe AutoNation is more favorable than Pep Boys – Manny Moe & Jack.

Insider & Institutional Ownership

66.0% of AutoNation shares are owned by institutional investors. 3.1% of AutoNation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Pep Boys – Manny Moe & Jack and AutoNation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pep Boys – Manny Moe & Jack 0.21% 0.79% 0.29%
AutoNation 1.90% 16.71% 3.95%

Earnings & Valuation

This table compares Pep Boys – Manny Moe & Jack and AutoNation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Pep Boys – Manny Moe & Jack N/A N/A N/A N/A N/A
AutoNation $21.47 billion 0.19 $916.20 million $4.02 10.04

AutoNation has higher revenue and earnings than Pep Boys – Manny Moe & Jack.

Summary

AutoNation beats Pep Boys – Manny Moe & Jack on 8 of the 8 factors compared between the two stocks.

About Pep Boys – Manny Moe & Jack

Pep Boys-Manny, Moe & Jack is a service and automotive aftermarket company. The Company’s stores are organized into a hub and spoke network, including supercenters and service and tire centers. Supercenters average approximately 20,000 square feet and combine do-it-for-me (DIFM) service labor, installed merchandise and tire offerings with do-it-yourself (DIY) parts and accessories. The Company’s Supercenters also have a commercial sales program that provides prompt delivery of parts, tires and equipment to automotive repair shops and dealers. Service and Tire centers, which average approximately 6,000 square feet, provide DIFM services in neighborhood locations that are located where the customers live or work. Service and Tire Centers are designed to capture market share and leverage the Company’s existing Supercenters and support infrastructure. The Company also operates DIY only Pep Express stores.

About AutoNation

AutoNation, Inc. (AutoNation) is an automotive retailer in the United States. The Company offers a range of automotive products and services, including new vehicles, used vehicles, parts and service, which includes automotive repair and maintenance services, as well as wholesale parts and collision businesses, and automotive finance and insurance products, including vehicle service and other protection products, as well as the arranging of financing for vehicle purchases through third-party finance sources. It operates through three segments: Domestic, Import and Premium Luxury. Its Domestic segment consists of retail automotive franchises that sell new vehicles manufactured by General Motors, Ford and FCA US. The Import segment consists of retail automotive franchises that sell new vehicles manufactured primarily by Toyota, Honda and Nissan. The Premium Luxury segment consists of retail automotive franchises that sell new vehicles manufactured by Mercedes-Benz, BMW, Audi and Lexus.

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