AutoNation (NYSE: AN) and Asbury Automotive Group (NYSE:ABG) are both retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitability, risk and dividends.
Profitability
This table compares AutoNation and Asbury Automotive Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| AutoNation | 1.90% | 16.71% | 3.95% |
| Asbury Automotive Group | 2.53% | 46.58% | 5.69% |
Analyst Recommendations
This is a breakdown of recent recommendations for AutoNation and Asbury Automotive Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| AutoNation | 0 | 8 | 3 | 0 | 2.27 |
| Asbury Automotive Group | 1 | 4 | 0 | 0 | 1.80 |
AutoNation currently has a consensus target price of $46.56, suggesting a potential upside of 11.01%. Asbury Automotive Group has a consensus target price of $56.75, suggesting a potential upside of 10.84%. Given AutoNation’s stronger consensus rating and higher possible upside, equities analysts clearly believe AutoNation is more favorable than Asbury Automotive Group.
Insider and Institutional Ownership
68.8% of AutoNation shares are held by institutional investors. Comparatively, 99.9% of Asbury Automotive Group shares are held by institutional investors. 3.1% of AutoNation shares are held by insiders. Comparatively, 11.9% of Asbury Automotive Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Earnings & Valuation
This table compares AutoNation and Asbury Automotive Group’s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| AutoNation | $21.47 billion | 0.20 | $916.20 million | $4.02 | 10.43 |
| Asbury Automotive Group | $6.53 billion | 0.16 | $326.10 million | $7.68 | 6.67 |
AutoNation has higher revenue and earnings than Asbury Automotive Group. Asbury 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.
Volatility & Risk
AutoNation has a beta of 1.24, indicating that its stock price is 24% more volatile than the S&P 500. Comparatively, Asbury Automotive Group has a beta of 1.42, indicating that its stock price is 42% more volatile than the S&P 500.
About AutoNation
AutoNation, Inc. (AutoNation) is an automotive retailer in the United States. The Company offers a range of automotive products and services, including new vehicles, used vehicles, parts and service, which includes automotive repair and maintenance services, as well as wholesale parts and collision businesses, and automotive finance and insurance products, including vehicle service and other protection products, as well as the arranging of financing for vehicle purchases through third-party finance sources. It operates through three segments: Domestic, Import and Premium Luxury. Its Domestic segment consists of retail automotive franchises that sell new vehicles manufactured by General Motors, Ford and FCA US. The Import segment consists of retail automotive franchises that sell new vehicles manufactured primarily by Toyota, Honda and Nissan. The Premium Luxury segment consists of retail automotive franchises that sell new vehicles manufactured by Mercedes-Benz, BMW, Audi and Lexus.
About Asbury Automotive Group
Asbury Automotive Group, Inc. is an automotive retailer in the United States. As of December 31, 2016, the Company owned and operated 93 new vehicle franchises, representing 28 brands of automobiles at 77 dealership locations, and 23 collision centers in the United States. In addition, as of December 31, 2016, it owned and operated two standalone used vehicle stores in Florida. Its stores offer automotive products and services, including new and used vehicles; parts and service, including vehicle repair and maintenance services, replacement parts, and collision repair services; and finance and insurance products, including arranging vehicle financing through third parties and aftermarket products, such as extended service contracts, guaranteed asset protection (GAP) insurance, prepaid maintenance, and credit life and disability insurance. Its new vehicle revenues include new vehicle sales and lease transactions arranged by dealerships with third-party financial institutions.
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