Groupon (NASDAQ:GRPN – Get Free Report) and Dollarama (OTCMKTS:DLMAF – Get Free Report) are both consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, earnings, institutional ownership, valuation, dividends and risk.
Analyst Recommendations
This is a summary of current recommendations for Groupon and Dollarama, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Groupon | 2 | 1 | 1 | 0 | 1.75 |
| Dollarama | 0 | 4 | 5 | 5 | 3.07 |
Groupon presently has a consensus price target of $26.00, indicating a potential upside of 38.67%. Given Groupon’s higher possible upside, research analysts clearly believe Groupon is more favorable than Dollarama.
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Groupon | $498.42 million | 1.53 | -$83.52 million | ($3.11) | -6.03 |
| Dollarama | $5.21 billion | 6.14 | $940.70 million | $2.64 | 45.04 |
Dollarama has higher revenue and earnings than Groupon. Groupon is trading at a lower price-to-earnings ratio than Dollarama, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
90.0% of Groupon shares are held by institutional investors. 36.6% of Groupon shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Profitability
This table compares Groupon and Dollarama’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Groupon | -25.26% | N/A | -20.28% |
| Dollarama | 17.65% | 94.77% | 17.12% |
Summary
Dollarama beats Groupon on 11 of the 14 factors compared between the two stocks.
About Groupon
Groupon, Inc., together with its subsidiaries, operates a marketplace that connects consumers to merchants. It operates in two segments, North America and International. The company sells goods or services on behalf of third-party merchants. It serves customers through its mobile applications and websites. The company was formerly known as ThePoint.com, Inc. and changed its name to Groupon, Inc. in October 2008. Groupon, Inc. was incorporated in 2008 and is headquartered in Chicago, Illinois.
About Dollarama
Dollarama Inc. operates a chain of dollar stores in Canada. Its stores offer general merchandise, consumables, and seasonal products. It also sells its products through online store. The company was formerly known as Dollarama Capital Corporation and changed its name to Dollarama Inc. in September 2009. Dollarama Inc. was founded in 1992 and is headquartered in Mount Royal, Canada.
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