Comparing Driven Brands (NASDAQ:DRVN) & Tandy Leather Factory (NASDAQ:TLF)

Tandy Leather Factory (NASDAQ:TLF) and Driven Brands (NASDAQ:DRVN) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, dividends, earnings, institutional ownership, risk and profitability.

Volatility and Risk

Tandy Leather Factory has a beta of 0.5, meaning that its share price is 50% less volatile than the S&P 500. Comparatively, Driven Brands has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500.

Institutional & Insider Ownership

56.4% of Tandy Leather Factory shares are held by institutional investors. Comparatively, 77.1% of Driven Brands shares are held by institutional investors. 36.2% of Tandy Leather Factory shares are held by company insiders. Comparatively, 4.4% of Driven Brands shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Tandy Leather Factory and Driven Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tandy Leather Factory	-2.14%	-3.31%	-1.98%
Driven Brands	8.61%	24.13%	5.03%

Earnings & Valuation

This table compares Tandy Leather Factory and Driven Brands”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tandy Leather Factory	$76.32 million	0.28	$9.10 million	($0.17)	-15.41
Driven Brands	$1.86 billion	1.14	$140.16 million	$1.04	12.38

Driven Brands has higher revenue and earnings than Tandy Leather Factory. Tandy Leather Factory is trading at a lower price-to-earnings ratio than Driven Brands, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings for Tandy Leather Factory and Driven Brands, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tandy Leather Factory	1	0	0	0	1.00
Driven Brands	0	7	5	2	2.64

Driven Brands has a consensus price target of $16.77, suggesting a potential upside of 30.24%. Given Driven Brands’ stronger consensus rating and higher possible upside, analysts clearly believe Driven Brands is more favorable than Tandy Leather Factory.

Summary

Driven Brands beats Tandy Leather Factory on 14 of the 15 factors compared between the two stocks.

About Tandy Leather Factory

Tandy Leather Factory, Inc. engages in the distribution of leather and related products. It offers leather, leatherworking tools, buckles and adornments for belts, leather dyes and finishes, saddle and tack hardware, and do-it-yourself kits. It operates through North America and International geographical segments. The North America geographical segment consists of 115 stores, which offer a broad selection of products combined with leathercraft expertise in a one-stop shop. The International geographical segment comprises of similar to North America segment but generally located in light industrial areas. The company was founded by J. Wray Thompson, Sr. and Ronald C. Morgan in 1980 and is headquartered in Fort Worth, TX.

About Driven Brands

Driven Brands Holdings Inc., together with its subsidiaries, provides automotive services to retail and commercial customers in the United States, Canada, and internationally. It offers various services, such as paint, collision, glass, repair, car wash, oil change, and maintenance services. The company also distributes automotive parts, including radiators, air conditioning components, and exhaust products to automotive repair shops, auto parts stores, body shops, and other auto repair outlets; windshields and glass accessories through a network of distribution centers; and consumable products, such as oil filters and wiper blades, as well as training services to repair and maintenance, and paint and collision shops. It sells its products and services under the CARSTAR, IMO, MAACO, Meineke Car Care Centers, PH Vitres D’Autos, Take 5 Oil Change, Take 5 Car Wash, Auto Glass Now, Fix Auto USA, and 1-800-Radiator & A/C, Spire Supply, and Automotive Training Institute brands. The company was founded in 1972 and is headquartered in Charlotte, North Carolina.