Critical Analysis: Ollie’s Bargain Outlet (NASDAQ:OLLI) versus Grocery Outlet (NASDAQ:GO)

Ollie’s Bargain Outlet (NASDAQ:OLLI) and Grocery Outlet (NASDAQ:GO) are both consumer staples companies, but which is the better stock? We will compare the two companies based on the strength of their risk, profitability, earnings, institutional ownership, analyst recommendations, valuation and dividends.

Risk & Volatility

Ollie’s Bargain Outlet has a beta of 0.41, indicating that its share price is 59% less volatile than the S&P 500. Comparatively, Grocery Outlet has a beta of 0.33, indicating that its share price is 67% less volatile than the S&P 500.

Earnings and Valuation

This table compares Ollie’s Bargain Outlet and Grocery Outlet”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ollie’s Bargain Outlet	$2.27 billion	3.36	$199.76 million	$3.45	36.14
Grocery Outlet	$4.37 billion	0.25	$39.47 million	($0.05)	-225.00

Ollie’s Bargain Outlet has higher earnings, but lower revenue than Grocery Outlet. Grocery Outlet is trading at a lower price-to-earnings ratio than Ollie’s Bargain Outlet, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Ollie’s Bargain Outlet and Grocery Outlet, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ollie’s Bargain Outlet	0	5	9	0	2.64
Grocery Outlet	2	7	3	1	2.23

Ollie’s Bargain Outlet currently has a consensus target price of $144.00, indicating a potential upside of 15.50%. Grocery Outlet has a consensus target price of $15.73, indicating a potential upside of 39.80%. Given Grocery Outlet’s higher possible upside, analysts plainly believe Grocery Outlet is more favorable than Ollie’s Bargain Outlet.

Profitability

This table compares Ollie’s Bargain Outlet and Grocery Outlet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ollie’s Bargain Outlet	8.74%	12.66%	8.20%
Grocery Outlet	-0.10%	5.86%	2.13%

Institutional & Insider Ownership

99.9% of Grocery Outlet shares are held by institutional investors. 0.8% of Ollie’s Bargain Outlet shares are held by company insiders. Comparatively, 4.5% of Grocery Outlet shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Ollie’s Bargain Outlet beats Grocery Outlet on 10 of the 15 factors compared between the two stocks.

About Ollie’s Bargain Outlet

Ollie’s Bargain Outlet Holdings, Inc. is a holding company, which engages in the retail of closeouts, excess inventory, and salvage merchandise. It offers overstocks, package changes, manufacturer refurbished goods, and irregulars. The company’s products include housewares, food, books and stationery, bed and bath, floor coverings, electronics and toys. Ollie’s Bargain Outlet Holdings was founded by Mark Butler, Mort Bernstein, Oliver Rosenberg and Harry Coverman on July 29, 1982, and is headquartered in Harrisburg, PA.

About Grocery Outlet

Grocery Outlet Holding Corp. operates as a retailer of consumables and fresh products sold through independently operated stores in the United States. Its stores offer products in various categories, such as dairy and deli, produce, floral, fresh meat, seafood products, grocery, general merchandise, health and beauty care, frozen food, beer and wine, and ethnic products. The company was founded in 1946 and is headquartered in Emeryville, California.