Analyzing Warby Parker (NYSE:WRBY) and BJ’s Wholesale Club (NYSE:BJ)

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

Risk and Volatility

Warby Parker has a beta of 1.96, meaning that its share price is 96% more volatile than the S&P 500. Comparatively, BJ’s Wholesale Club has a beta of 0.23, meaning that its share price is 77% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Warby Parker and BJ’s Wholesale Club, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Warby Parker	0	5	9	0	2.64
BJ’s Wholesale Club	1	8	9	0	2.44

Warby Parker presently has a consensus price target of $29.50, suggesting a potential upside of 21.42%. BJ’s Wholesale Club has a consensus price target of $105.27, suggesting a potential upside of 18.07%. Given Warby Parker’s stronger consensus rating and higher probable upside, equities analysts clearly believe Warby Parker is more favorable than BJ’s Wholesale Club.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Warby Parker	0.15%	2.30%	1.18%
BJ’s Wholesale Club	2.62%	26.67%	7.59%

Valuation & Earnings

This table compares Warby Parker and BJ’s Wholesale Club”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Warby Parker	$871.91 million	2.98	$1.64 million	$0.02	1,214.75
BJ’s Wholesale Club	$21.46 billion	0.53	$578.38 million	$4.35	20.50

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

Institutional & Insider Ownership

93.2% of Warby Parker shares are owned by institutional investors. Comparatively, 98.6% of BJ’s Wholesale Club shares are owned by institutional investors. 16.8% of Warby Parker shares are owned by company insiders. Comparatively, 1.1% of BJ’s Wholesale Club shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

BJ’s Wholesale Club beats Warby Parker on 7 of the 13 factors compared between the two stocks.

About Warby Parker

Warby Parker Inc. provides eyewear products in the United States and Canada. The company offers eyeglasses, sunglasses, light-responsive lenses, blue-light-filtering lenses, non-prescription lenses, and contact lenses. It also provides accessories, such as cases, lenses kit with anti-fog spray, pouches, and anti-fog lens spray through its retail stores, website, and mobile apps. In addition, the company offers eye exams and vision tests. Warby Parker Inc. was incorporated in 2009 and is headquartered in New York, New York.

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.