Valvoline (NYSE:VVV) & AutoZone (NYSE:AZO) Critical Comparison

Valvoline (NYSE:VVV) and AutoZone (NYSE:AZO) are both retail/wholesale companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, analyst recommendations, valuation and profitability.

Earnings and Valuation

This table compares Valvoline and AutoZone”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Valvoline	$1.62 billion	2.94	$211.50 million	$2.06	18.17
AutoZone	$18.49 billion	3.25	$2.66 billion	$147.75	24.23

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

Institutional & Insider Ownership

96.1% of Valvoline shares are held by institutional investors. Comparatively, 92.7% of AutoZone shares are held by institutional investors. 0.7% of Valvoline shares are held by company insiders. Comparatively, 2.1% of AutoZone 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.

Profitability

This table compares Valvoline and AutoZone’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Valvoline	15.97%	106.36%	8.52%
AutoZone	13.56%	-56.07%	14.02%

Risk and Volatility

Valvoline has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500. Comparatively, AutoZone has a beta of 0.4, suggesting that its share price is 60% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Valvoline and AutoZone, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Valvoline	0	4	9	1	2.79
AutoZone	0	2	18	3	3.04

Valvoline presently has a consensus target price of $42.54, indicating a potential upside of 13.64%. AutoZone has a consensus target price of $4,072.24, indicating a potential upside of 13.76%. Given AutoZone’s stronger consensus rating and higher probable upside, analysts plainly believe AutoZone is more favorable than Valvoline.

Summary

AutoZone beats Valvoline on 11 of the 15 factors compared between the two stocks.

About Valvoline

Valvoline Inc. engages in the operation and franchising of vehicle service centers and retail stores in the United States and Canada. The company, through its service centers, provides fluid exchange for motor oil, transmission and differential fluid, and coolant; parts replacement for batteries, filters, wiper blades, and belts; and safety services, such as tire inflation and rotation, bulbs, and safety checks. It offers its services for passenger cars, hybrid and battery electric vehicles, and light and medium duty vehicles. The company was founded in 1866 and is headquartered in Lexington, Kentucky.

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.