CarMax (NYSE:KMX) and Penske Automotive Group (NYSE:PAG) are both retail/wholesale companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, institutional ownership, analyst recommendations and risk.
Analyst Recommendations
This is a breakdown of current ratings and price targets for CarMax and Penske Automotive Group, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
CarMax | 2 | 1 | 12 | 1 | 2.75 |
Penske Automotive Group | 0 | 2 | 6 | 0 | 2.75 |
CarMax currently has a consensus target price of $109.8750, indicating a potential downside of 9.49%. Penske Automotive Group has a consensus target price of $65.8889, indicating a potential downside of 5.56%. Given Penske Automotive Group's higher possible upside, analysts clearly believe Penske Automotive Group is more favorable than CarMax.
Insider & Institutional Ownership
97.6% of CarMax shares are owned by institutional investors. Comparatively, 38.1% of Penske Automotive Group shares are owned by institutional investors. 2.1% of CarMax 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.
Profitability
This table compares CarMax and Penske Automotive Group's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
CarMax | 4.01% | 20.30% | 3.77% |
Penske Automotive Group | 2.17% | 15.09% | 3.20% |
Volatility & Risk
CarMax has a beta of 1.76, meaning that its share price is 76% 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.
Earnings and Valuation
This table compares CarMax 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 |
---|
CarMax | $20.32 billion | 0.97 | $888.43 million | $5.33 | 22.77 |
Penske Automotive Group | $23.18 billion | 0.24 | $435.80 million | $5.28 | 13.21 |
CarMax has higher earnings, but lower revenue than Penske Automotive Group. Penske Automotive Group is trading at a lower price-to-earnings ratio than CarMax, indicating that it is currently the more affordable of the two stocks.
Summary
CarMax beats Penske Automotive Group on 11 of the 14 factors compared between the two stocks.