Analyzing RH (NYSE:RH) and Asbury Automotive Group (NYSE:ABG)

Asbury Automotive Group (NYSE:ABG) and RH (NYSE:RH) are both mid-cap consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, risk, earnings, valuation and analyst recommendations.

Earnings & Valuation

This table compares Asbury Automotive Group and RH”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Asbury Automotive Group	$18.00 billion	0.20	$492.00 million	$25.06	8.16
RH	$3.44 billion	0.73	$124.79 million	$5.62	23.67

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

Risk and Volatility

Asbury Automotive Group has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500. Comparatively, RH has a beta of 1.92, indicating that its share price is 92% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for Asbury Automotive Group and RH, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Asbury Automotive Group	2	5	3	0	2.10
RH	3	9	7	0	2.21

Asbury Automotive Group presently has a consensus price target of $220.88, indicating a potential upside of 8.07%. RH has a consensus price target of $163.79, indicating a potential upside of 23.11%. Given RH’s stronger consensus rating and higher probable upside, analysts plainly believe RH is more favorable than Asbury Automotive Group.

Profitability

This table compares Asbury Automotive Group and RH’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Asbury Automotive Group	2.66%	11.85%	4.09%
RH	3.23%	132.79%	1.63%

Institutional & Insider Ownership

90.2% of RH shares are held by institutional investors. 0.7% of Asbury Automotive Group shares are held by insiders. Comparatively, 26.9% of RH shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

RH beats Asbury Automotive Group on 10 of the 14 factors compared between the two stocks.

About Asbury Automotive Group

Asbury Automotive Group, Inc., together with its subsidiaries, operates as an automotive retailer in the United States. It offers a range of automotive products and services, including new and used vehicles; and vehicle repair and maintenance services, replacement parts, and collision repair services. The company also provides finance and insurance products, including arranging vehicle financing through third parties; and aftermarket products, such as extended service contracts, guaranteed asset protection debt cancellation, prepaid maintenance, and disability and accident insurance. Asbury Automotive Group, Inc. was founded in 1996 and is based in Duluth, Georgia.

About RH

RH, together with its subsidiaries, operates as a retailer in the home furnishings market. The company offers products in various categories, including furniture, lighting, textiles, bathware, décor, outdoor and garden, baby, child, and teen furnishings. It provides its products through rh.com, rhbabyandchild.com, rhteen.com, rhmodern.com, and waterworks.com online channels, as well as operates RH Galleries, RH outlet stores, RH Guesthouse, and Waterworks showrooms in the United States, Canada, the United Kingdom, and Germany. The company was formerly known as Restoration Hardware Holdings, Inc. and changed its name to RH in January 2017. RH was incorporated in 2011 and is headquartered in Corte Madera, California.