Critical Review: J. Sainsbury (OTCMKTS:JSAIY) and BJ’s Wholesale Club (NYSE:BJ)

BJ’s Wholesale Club (NYSE:BJ) and J. Sainsbury (OTCMKTS:JSAIY) are both consumer staples companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, profitability, dividends, risk, valuation, earnings and institutional ownership.

Risk and Volatility

BJ’s Wholesale Club has a beta of 0.21, meaning that its stock price is 79% less volatile than the S&P 500. Comparatively, J. Sainsbury has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for BJ’s Wholesale Club and J. Sainsbury, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BJ’s Wholesale Club	1	9	10	0	2.45
J. Sainsbury	0	5	1	0	2.17

BJ’s Wholesale Club presently has a consensus target price of $106.06, suggesting a potential upside of 17.28%. Given BJ’s Wholesale Club’s stronger consensus rating and higher probable upside, analysts clearly believe BJ’s Wholesale Club is more favorable than J. Sainsbury.

Valuation and Earnings

This table compares BJ’s Wholesale Club and J. Sainsbury”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BJ’s Wholesale Club	$21.46 billion	0.54	$578.38 million	$4.57	19.79
J. Sainsbury	$45.10 billion	0.22	$526.74 million	N/A	N/A

BJ’s Wholesale Club has higher earnings, but lower revenue than J. Sainsbury.

Institutional & Insider Ownership

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
BJ’s Wholesale Club	2.64%	27.40%	7.69%
J. Sainsbury	N/A	N/A	N/A

Summary

BJ’s Wholesale Club beats J. Sainsbury on 10 of the 12 factors compared between the two stocks.

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.

About J. Sainsbury

J Sainsbury plc, together with its subsidiaries, engages in the food, general merchandise and clothing retailing, and financial services activities in the United Kingdom and the Republic of Ireland. It operates through three segments: Retail Food, Retail General Merchandise and Clothing, and Financial Services. The company operates various store formats, including convenience stores and supermarkets. It is also involved in the online grocery and general merchandise operations. In addition, it offers financial services, such as credit cards, scorecards, and personal loans; and home, car, pet, travel, and life insurance products. J Sainsbury plc was founded in 1869 and is headquartered in London, the United Kingdom.