Analyzing BJ’s Wholesale Club (NYSE:BJ) and Albertsons Companies (NYSE:ACI)

Albertsons Companies (NYSE:ACI) and BJ’s Wholesale Club (NYSE:BJ) are both consumer staples companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, profitability and dividends.

Profitability

This table compares Albertsons Companies and BJ’s Wholesale Club’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Albertsons Companies	0.08%	45.59%	3.83%
BJ’s Wholesale Club	2.64%	27.40%	7.69%

Risk and Volatility

Albertsons Companies has a beta of 0.37, indicating that its stock price is 63% less volatile than the S&P 500. Comparatively, BJ’s Wholesale Club has a beta of 0.18, indicating that its stock price is 82% less volatile than the S&P 500.

Earnings & Valuation

This table compares Albertsons Companies and BJ’s Wholesale Club”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Albertsons Companies	$83.17 billion	0.07	$217.40 million	$0.08	156.62
BJ’s Wholesale Club	$21.46 billion	0.55	$578.38 million	$4.57	20.39

BJ’s Wholesale Club has lower revenue, but higher earnings than Albertsons Companies. BJ’s Wholesale Club is trading at a lower price-to-earnings ratio than Albertsons Companies, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations for Albertsons Companies and BJ’s Wholesale Club, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Albertsons Companies	4	8	5	0	2.06
BJ’s Wholesale Club	1	9	10	0	2.45

Albertsons Companies presently has a consensus price target of $15.31, indicating a potential upside of 22.17%. BJ’s Wholesale Club has a consensus price target of $106.06, indicating a potential upside of 13.80%. Given Albertsons Companies’ higher probable upside, equities analysts clearly believe Albertsons Companies is more favorable than BJ’s Wholesale Club.

Institutional & Insider Ownership

71.3% of Albertsons Companies shares are owned by institutional investors. Comparatively, 98.6% of BJ’s Wholesale Club shares are owned by institutional investors. 1.2% of Albertsons Companies shares are owned by insiders. Comparatively, 1.1% of BJ’s Wholesale Club shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

BJ’s Wholesale Club beats Albertsons Companies on 8 of the 14 factors compared between the two stocks.

About Albertsons Companies

Albertsons Companies, Inc., through its subsidiaries, engages in the operation of food and drug stores in the United States. The company’s food and drug retail stores offer grocery products, general merchandise, health and beauty care products, pharmacy, fuel, and other items and services. It also manufactures and processes food products for sale in stores. It operates stores under various banners, including Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Jewel-Osco, Acme, Shaw’s, Star Market, United Supermarkets, Market Street, Haggen, Kings Food Markets, and Balducci’s Food Lovers Market; and pharmacies, in-store branded coffee shops, adjacent fuel centers, distribution centers, and manufacturing facilities, as well as various digital platforms. Albertsons Companies, Inc. was founded in 1860 and is headquartered in Boise, Idaho. Albertsons Companies, Inc. operates as a subsidiary of Albertsons Investor Holdings LLC.

About BJ’s Wholesale Club

BJ’s Wholesale Club Holdings, Inc. engages in the operation of membership warehouse clubs. Its product categories include grocery, household and pet, television and electronics, furniture, computer and tablets, patio and outdoor living, lawn and garden, baby and kids, toys, home, health and beauty, appliances, and jewelry. The company was founded in 1984 and is headquartered in Marlborough, MA.