Critical Analysis: Krispy Kreme (NASDAQ:DNUT) & Ollie’s Bargain Outlet (NASDAQ:OLLI)

Ollie’s Bargain Outlet (NASDAQ:OLLI) and Krispy Kreme (NASDAQ:DNUT) are both consumer staples companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, profitability, dividends, risk and earnings.

Volatility and Risk

Ollie’s Bargain Outlet has a beta of 0.41, suggesting that its stock price is 59% less volatile than the S&P 500. Comparatively, Krispy Kreme has a beta of 1.33, suggesting that its stock price is 33% more volatile than the S&P 500.

Profitability

This table compares Ollie’s Bargain Outlet and Krispy Kreme’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ollie’s Bargain Outlet	8.74%	12.66%	8.20%
Krispy Kreme	-33.27%	-5.13%	-1.67%

Valuation and Earnings

This table compares Ollie’s Bargain Outlet and Krispy Kreme”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ollie’s Bargain Outlet	$2.27 billion	3.36	$199.76 million	$3.45	36.04
Krispy Kreme	$1.67 billion	0.38	$3.10 million	($2.99)	-1.25

Ollie’s Bargain Outlet has higher revenue and earnings than Krispy Kreme. Krispy Kreme is trading at a lower price-to-earnings ratio than Ollie’s Bargain Outlet, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

81.7% of Krispy Kreme shares are held by institutional investors. 0.8% of Ollie’s Bargain Outlet shares are held by insiders. Comparatively, 3.0% of Krispy Kreme 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.

Analyst Ratings

This is a breakdown of current ratings and target prices for Ollie’s Bargain Outlet and Krispy Kreme, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ollie’s Bargain Outlet	0	5	9	0	2.64
Krispy Kreme	3	5	4	0	2.08

Ollie’s Bargain Outlet currently has a consensus price target of $144.00, suggesting a potential upside of 15.81%. Krispy Kreme has a consensus price target of $5.51, suggesting a potential upside of 47.84%. Given Krispy Kreme’s higher probable upside, analysts plainly believe Krispy Kreme is more favorable than Ollie’s Bargain Outlet.

Summary

Ollie’s Bargain Outlet beats Krispy Kreme on 10 of the 14 factors compared between the two stocks.

About Ollie’s Bargain Outlet

Ollie’s Bargain Outlet Holdings, Inc. is a holding company, which engages in the retail of closeouts, excess inventory, and salvage merchandise. It offers overstocks, package changes, manufacturer refurbished goods, and irregulars. The company’s products include housewares, food, books and stationery, bed and bath, floor coverings, electronics and toys. Ollie’s Bargain Outlet Holdings was founded by Mark Butler, Mort Bernstein, Oliver Rosenberg and Harry Coverman on July 29, 1982, and is headquartered in Harrisburg, PA.

About Krispy Kreme

Krispy Kreme, Inc., together with its subsidiaries, produces doughnuts in the United States, the United Kingdom, Ireland, Australia, New Zealand, Mexico, Canada, Japan, and internationally. The company operates through three segments: U.S., International, and Market Development. The company offers doughnut experiences through hot light theater and fresh shops, delivered fresh daily branded cabinets and merchandising units within grocery and convenience stores, quick service restaurants, club memberships, drug stores, and ecommerce, as well as through its branded sweet treat line comprising Krispy Kreme branded sweet treats. It also provides cookies under the Insomnia Cookies brand, cookie cakes, ice cream, cookie-wiches, and brownies; and operates Krispy Kreme company-owned shops and franchise shops. The company was formerly known as Krispy Kreme Doughnuts, Inc. and changed its name to Krispy Kreme, Inc. in May 2021. Krispy Kreme, Inc. was founded in 1937 and is based in Charlotte, North Carolina.