Critical Contrast: DICK’S Sporting Goods (NYSE:DKS) & AutoZone (NYSE:AZO)

AutoZone (NYSE:AZO) and DICK’S Sporting Goods (NYSE:DKS) are both large-cap consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, profitability and dividends.

Risk & Volatility

AutoZone has a beta of 0.34, suggesting that its stock price is 66% less volatile than the S&P 500. Comparatively, DICK’S Sporting Goods has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500.

Profitability

This table compares AutoZone and DICK’S Sporting Goods’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AutoZone	12.40%	-80.35%	12.33%
DICK’S Sporting Goods	3.97%	19.21%	6.07%

Insider and Institutional Ownership

92.7% of AutoZone shares are held by institutional investors. Comparatively, 89.8% of DICK’S Sporting Goods shares are held by institutional investors. 2.6% of AutoZone shares are held by company insiders. Comparatively, 28.9% of DICK’S Sporting Goods shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares AutoZone and DICK’S Sporting Goods”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AutoZone	$18.94 billion	2.47	$2.50 billion	$145.45	19.66
DICK’S Sporting Goods	$17.22 billion	0.63	$849.24 million	$9.31	13.03

AutoZone has higher revenue and earnings than DICK’S Sporting Goods. DICK’S Sporting Goods is trading at a lower price-to-earnings ratio than AutoZone, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations and price targets for AutoZone and DICK’S Sporting Goods, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AutoZone	0	6	20	1	2.81
DICK’S Sporting Goods	3	9	11	0	2.35

AutoZone presently has a consensus target price of $3,913.62, indicating a potential upside of 36.86%. DICK’S Sporting Goods has a consensus target price of $167.20, indicating a potential upside of 37.85%. Given DICK’S Sporting Goods’ higher possible upside, analysts clearly believe DICK’S Sporting Goods is more favorable than AutoZone.

Summary

AutoZone beats DICK’S Sporting Goods on 11 of the 15 factors compared between the two stocks.

About AutoZone

AutoZone, Inc. retails and distributes automotive replacement parts and accessories in the United States, Mexico, and Brazil. The company provides various products for cars, sport utility vehicles, vans, and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. It also offers A/C compressors, batteries and accessories, bearings, belts and hoses, calipers, chassis, clutches, CV axles, engines, fuel pumps, fuses, ignition and lighting products, mufflers, radiators, starters and alternators, thermostats, and water pumps, as well as tire repairs. In addition, the company provides maintenance products, such as antifreeze and windshield washer fluids; brake drums, rotors, shoes, and pads; brake and power steering fluids, and oil and fuel additives; oil and transmission fluids; oil, cabin, air, fuel, and transmission filters; oxygen sensors; paints and accessories; refrigerants and accessories; shock absorbers and struts; spark plugs and wires; and windshield wipers. Further, it offers air fresheners, cell phone accessories, drinks and snacks, floor mats and seat covers, interior and exterior accessories, mirrors, performance products, protectants and cleaners, sealants and adhesives, steering wheel covers, tools, vehicle entertainment systems, and wash and wax products, as well as towing services. Additionally, the company provides a sales program that offers commercial credit and delivery of parts and other products; sells automotive diagnostic and repair software under the ALLDATA brand through alldata.com and alldatadiy.com; and automotive hard parts, maintenance items, accessories, and non-automotive products through autozone.com. AutoZone, Inc. was founded in 1979 and is headquartered in Memphis, Tennessee.

About DICK’S Sporting Goods

DICK’s Sporting Goods, Inc. engages in the retailing of an extensive assortment of authentic sports equipment, apparel, footwear, and accessories. It also offers its products both online and through mobile applications. The company was founded by Richard T. Stack in 1948 and is headquartered in Coraopolis, PA.