Head to Head Analysis: Group 1 Automotive (NYSE:GPI) and Ulta Beauty (NASDAQ:ULTA)

Ulta Beauty (NASDAQ:ULTA) and Group 1 Automotive (NYSE:GPI) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Ulta Beauty and Group 1 Automotive, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ulta Beauty	0	8	23	1	2.78
Group 1 Automotive	3	2	5	0	2.20

Ulta Beauty currently has a consensus price target of $635.87, indicating a potential downside of 2.32%. Group 1 Automotive has a consensus price target of $330.10, indicating a potential upside of 27.91%. Given Group 1 Automotive’s higher possible upside, analysts clearly believe Group 1 Automotive is more favorable than Ulta Beauty.

Volatility & Risk

Ulta Beauty has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500. Comparatively, Group 1 Automotive has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500.

Profitability

This table compares Ulta Beauty and Group 1 Automotive’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ulta Beauty	9.34%	45.40%	17.37%
Group 1 Automotive	1.75%	14.91%	4.19%

Insider and Institutional Ownership

90.4% of Ulta Beauty shares are held by institutional investors. Comparatively, 99.9% of Group 1 Automotive shares are held by institutional investors. 0.2% of Ulta Beauty shares are held by company insiders. Comparatively, 2.4% of Group 1 Automotive shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Ulta Beauty and Group 1 Automotive”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ulta Beauty	$12.39 billion	2.25	$1.15 billion	$27.44	23.72
Group 1 Automotive	$22.57 billion	0.14	$325.20 million	$31.60	8.17

Ulta Beauty has higher earnings, but lower revenue than Group 1 Automotive. Group 1 Automotive is trading at a lower price-to-earnings ratio than Ulta Beauty, indicating that it is currently the more affordable of the two stocks.

Summary

Ulta Beauty beats Group 1 Automotive on 9 of the 15 factors compared between the two stocks.

About Ulta Beauty

Ulta Beauty, Inc. is a specialty beauty retailer offering cosmetics, skincare, fragrance, haircare and related products. Its assortment includes both mass-market and prestige brands, as well as products sold under its own private-label brands. The company serves customers primarily through its retail stores across the United States and its e-commerce channels. Many stores also offer salon services, including haircuts, styling and hair color, alongside beauty products and services. Founded in 1990, Ulta Beauty is headquartered in Bolingbrook, Illinois.

About Group 1 Automotive

Group 1 Automotive, Inc. is an international automotive retailer headquartered in Houston, Texas. Founded in 1997, the company operates franchised dealerships and collision centers in the United States and the United Kingdom. Its dealerships sell new and used vehicles from a range of manufacturers and provide related services, including vehicle maintenance and repair, parts sales, collision repair, and automotive financing and insurance products. Group 1’s business also includes manufacturer-authorized service operations and parts departments that support customers throughout vehicle ownership.