Financial Review: Ross Stores (NASDAQ:ROST) and Asbury Automotive Group (NYSE:ABG)

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

Earnings and Valuation

This table compares Ross Stores and Asbury Automotive Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ross Stores	$22.75 billion	3.33	$2.15 billion	$8.26	28.72
Asbury Automotive Group	$18.00 billion	0.20	$492.00 million	$25.06	7.98

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

Insider & Institutional Ownership

86.9% of Ross Stores shares are owned by institutional investors. 2.1% of Ross Stores shares are owned by company insiders. Comparatively, 0.7% of Asbury Automotive Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Ross Stores and Asbury Automotive Group’s 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%
Asbury Automotive Group	2.66%	11.85%	4.09%

Analyst Recommendations

This is a breakdown of recent ratings for Ross Stores and Asbury Automotive Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ross Stores	0	4	16	1	2.86
Asbury Automotive Group	2	5	3	0	2.10

Ross Stores presently has a consensus target price of $277.72, indicating a potential upside of 17.06%. Asbury Automotive Group has a consensus target price of $222.88, indicating a potential upside of 11.43%. Given Ross Stores’ stronger consensus rating and higher possible upside, analysts clearly believe Ross Stores is more favorable than Asbury Automotive Group.

Volatility and Risk

Ross Stores has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500. Comparatively, Asbury Automotive Group has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500.

Summary

Ross Stores beats Asbury Automotive Group on 14 of the 15 factors compared between the two stocks.

About Ross Stores

Ross Stores, Inc. is an off-price retailer operating Ross Dress for Less and dd’s DISCOUNTS. Its stores offer name-brand and designer merchandise at discounted prices, with product selection and availability varying by location and season. Ross Dress for Less sells apparel, footwear, accessories, home fashions, furnishings, and other merchandise for the whole family. dd’s DISCOUNTS offers a similar off-price assortment, including clothing, shoes, home goods, and related products. The company traces its origins to a department store founded in San Bruno, California, in 1950.

About Asbury Automotive Group

Asbury Automotive Group is a U.S. automotive retailer that operates franchised new- and used-vehicle dealerships. Its dealerships sell vehicles from a range of manufacturers and offer related services, including vehicle financing and insurance products, maintenance and repairs, parts sales, and collision repair. The company also operates Clicklane, a digital platform that lets customers research, purchase, finance, and arrange delivery of vehicles online. Asbury was founded in 1995 and has expanded through acquisitions, including its 2021 purchase of Larry H. Miller Dealerships.