Reviewing Chewy (NYSE:CHWY) and Ross Stores (NASDAQ:ROST)

Ross Stores (NASDAQ:ROST) and Chewy (NYSE:CHWY) are both consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, institutional ownership and risk.

Valuation & Earnings

This table compares Ross Stores and Chewy”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ross Stores	$22.75 billion	3.32	$2.15 billion	$8.26	28.59
Chewy	$13.07 billion	0.56	$222.80 million	$0.66	27.72

Ross Stores has higher revenue and earnings than Chewy. Chewy is trading at a lower price-to-earnings ratio than Ross Stores, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Ross Stores and Chewy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ross Stores	10.85%	39.29%	15.79%
Chewy	2.09%	60.88%	7.83%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Ross Stores and Chewy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ross Stores	0	6	15	0	2.71
Chewy	1	7	16	1	2.68

Ross Stores currently has a consensus price target of $263.76, indicating a potential upside of 11.71%. Chewy has a consensus price target of $30.64, indicating a potential upside of 67.45%. Given Chewy’s higher probable upside, analysts plainly believe Chewy is more favorable than Ross Stores.

Volatility & Risk

Ross Stores has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500. Comparatively, Chewy has a beta of 1.42, suggesting that its share price is 42% more volatile than the S&P 500.

Insider and Institutional Ownership

86.9% of Ross Stores shares are owned by institutional investors. Comparatively, 93.1% of Chewy shares are owned by institutional investors. 2.1% of Ross Stores shares are owned by insiders. Comparatively, 0.3% of Chewy shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Ross Stores beats Chewy on 9 of the 15 factors compared between the two stocks.

About Ross Stores

Ross Stores, Inc., together with its subsidiaries, operates off-price retail apparel and home fashion stores under the Ross Dress for Less and dd’s DISCOUNTS brand names in the United States. Its stores primarily offer apparel, accessories, footwear, and home fashions. The company’s Ross Dress for Less stores sell its products at department and specialty stores to middle income households; and dd’s DISCOUNTS stores sell its products at department and discount stores for households with moderate income. Ross Stores, Inc. was incorporated in 1957 and is headquartered in Dublin, California.

About Chewy

Chewy, Inc., together with its subsidiaries, engages in the pure play e-commerce business in the United States. It provides pet food and treats, pet supplies and pet medications, and other pet-health products, as well as pet services for dogs, cats, fish, birds, small pets, horses, and reptiles through its retail websites and mobile applications. The company was founded in 2010 and is based in Plantation, Florida.