Reviewing Ross Stores (NASDAQ:ROST) & Petco Health and Wellness (NASDAQ:WOOF)

Ross Stores (NASDAQ:ROST) and Petco Health and Wellness (NASDAQ:WOOF) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, risk, earnings, dividends, analyst recommendations, institutional ownership and profitability.

Analyst Ratings

This is a summary of recent ratings and price targets for Ross Stores and Petco Health and Wellness, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ross Stores	0	6	15	0	2.71
Petco Health and Wellness	1	6	1	0	2.00

Ross Stores presently has a consensus price target of $263.76, suggesting a potential upside of 14.60%. Petco Health and Wellness has a consensus price target of $3.72, suggesting a potential upside of 37.18%. Given Petco Health and Wellness’ higher probable upside, analysts plainly believe Petco Health and Wellness is more favorable than Ross Stores.

Insider & Institutional Ownership

86.9% of Ross Stores shares are held by institutional investors. 2.1% of Ross Stores shares are held by company insiders. Comparatively, 6.5% of Petco Health and Wellness shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Ross Stores and Petco Health and Wellness”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ross Stores	$24.51 billion	3.01	$2.15 billion	$8.26	27.87
Petco Health and Wellness	$5.96 billion	0.15	$9.07 million	$0.02	135.65

Ross Stores has higher revenue and earnings than Petco Health and Wellness. Ross Stores is trading at a lower price-to-earnings ratio than Petco Health and Wellness, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Ross Stores and Petco Health and Wellness’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ross Stores	10.85%	39.29%	15.79%
Petco Health and Wellness	0.09%	1.36%	0.30%

Risk & Volatility

Ross Stores has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500. Comparatively, Petco Health and Wellness has a beta of 1.53, meaning that its share price is 53% more volatile than the S&P 500.

Summary

Ross Stores beats Petco Health and Wellness on 10 of the 14 factors compared between the two stocks.

About Ross Stores

Ross Stores, Inc., together with its subsidiaries, operates off-price retail apparel and home fashion stores under the Ross Dress for Less and dd’s DISCOUNTS brand names in the United States. Its stores primarily offer apparel, accessories, footwear, and home fashions. The company’s Ross Dress for Less stores sell its products at department and specialty stores to middle income households; and dd’s DISCOUNTS stores sell its products at department and discount stores for households with moderate income. Ross Stores, Inc. was incorporated in 1957 and is headquartered in Dublin, California.

About Petco Health and Wellness

Petco Health and Wellness Company, Inc., operates as a health and wellness company, focuses on enhancing the lives of pets, pet parents, and its Petco partners in the United States, Mexico, and Puerto Rico. The company provides veterinary care, grooming, training, tele-health, and Vital Care and pet health insurance services, as well as veterinary services through Vetco mobile clinics. It also offers pet consumables, supplies, and services through its petco.com, petcoach.co, petinsurancequotes.com, and pupbox.com websites. The company offers its products under the WholeHearted, Reddy, and Well & Good brands. Petco Health and Wellness Company, Inc. was founded in 1965 and is headquartered in San Diego, California.