AutoNation (NYSE:AN) and Penske Automotive Group (NYSE:PAG) are both mid-cap retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, profitability, dividends, institutional ownership, valuation, analyst recommendations and earnings.
Profitability
This table compares AutoNation and Penske Automotive Group's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
AutoNation | 1.92% | 17.17% | 5.35% |
Penske Automotive Group | 2.17% | 15.09% | 3.20% |
Institutional & Insider Ownership
63.4% of AutoNation shares are owned by institutional investors. Comparatively, 38.1% of Penske Automotive Group shares are owned by institutional investors. 2.1% of AutoNation shares are owned by company insiders. Comparatively, 44.1% of Penske Automotive Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Volatility and Risk
AutoNation has a beta of 1.57, meaning that its share price is 57% more volatile than the S&P 500. Comparatively, Penske Automotive Group has a beta of 1.61, meaning that its share price is 61% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of recent recommendations and price targets for AutoNation and Penske Automotive Group, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
AutoNation | 1 | 5 | 3 | 0 | 2.22 |
Penske Automotive Group | 0 | 3 | 6 | 0 | 2.67 |
AutoNation presently has a consensus target price of $62.1250, suggesting a potential downside of 18.99%. Penske Automotive Group has a consensus target price of $60.90, suggesting a potential downside of 6.77%. Given Penske Automotive Group's stronger consensus rating and higher probable upside, analysts clearly believe Penske Automotive Group is more favorable than AutoNation.
Earnings and Valuation
This table compares AutoNation and Penske Automotive Group's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
AutoNation | $21.34 billion | 0.32 | $450 million | $4.55 | 16.85 |
Penske Automotive Group | $23.18 billion | 0.23 | $435.80 million | $5.28 | 12.37 |
AutoNation has higher earnings, but lower revenue than Penske Automotive Group. Penske Automotive Group is trading at a lower price-to-earnings ratio than AutoNation, indicating that it is currently the more affordable of the two stocks.
Summary
Penske Automotive Group beats AutoNation on 8 of the 14 factors compared between the two stocks.