Financial Review: Floor & Decor (NYSE:FND) vs. Valvoline (NYSE:VVV)

Floor & Decor (NYSE:FND) and Valvoline (NYSE:VVV) are both mid-cap consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, dividends, risk, valuation, earnings and institutional ownership.

Volatility and Risk

Floor & Decor has a beta of 1.56, suggesting that its share price is 56% more volatile than the S&P 500. Comparatively, Valvoline has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500.

Valuation and Earnings

This table compares Floor & Decor and Valvoline”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Floor & Decor	$4.68 billion	1.17	$208.65 million	$2.23	22.98
Valvoline	$1.71 billion	2.60	$210.70 million	$0.80	43.52

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

Insider and Institutional Ownership

96.1% of Valvoline shares are owned by institutional investors. 1.8% of Floor & Decor shares are owned by company insiders. Comparatively, 0.7% of Valvoline shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Floor & Decor and Valvoline’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Floor & Decor	5.05%	8.40%	3.68%
Valvoline	5.17%	65.12%	7.11%

Analyst Recommendations

This is a summary of current recommendations and price targets for Floor & Decor and Valvoline, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Floor & Decor	5	12	4	0	1.95
Valvoline	0	5	13	0	2.72

Floor & Decor currently has a consensus price target of $54.70, indicating a potential upside of 6.74%. Valvoline has a consensus price target of $41.17, indicating a potential upside of 18.23%. Given Valvoline’s stronger consensus rating and higher probable upside, analysts clearly believe Valvoline is more favorable than Floor & Decor.

Summary

Valvoline beats Floor & Decor on 10 of the 14 factors compared between the two stocks.

About Floor & Decor

Floor & Decor Holdings, Inc. engages in the retail of hard surface flooring and related accessories. It provides wood, stone, and flooring products. Its products include vinyl, laminate, and tiles with materials installation for living rooms, kitchen, bathrooms, and walls. The company was founded by George Vincent West in 2000 and is headquartered in Atlanta, GA.

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.