Financial Review: Albertsons Companies (NYSE:ACI) and BJ’s Wholesale Club (NYSE:BJ)

BJ’s Wholesale Club (NYSE:BJ) and Albertsons Companies (NYSE:ACI) are both consumer staples companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.

Institutional and Insider Ownership

98.6% of BJ’s Wholesale Club shares are held by institutional investors. Comparatively, 71.3% of Albertsons Companies shares are held by institutional investors. 1.1% of BJ’s Wholesale Club shares are held by insiders. Comparatively, 1.2% of Albertsons Companies shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for BJ’s Wholesale Club and Albertsons Companies, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BJ’s Wholesale Club	1	9	10	0	2.45
Albertsons Companies	4	8	5	0	2.06

BJ’s Wholesale Club presently has a consensus price target of $106.06, suggesting a potential upside of 19.75%. Albertsons Companies has a consensus price target of $15.31, suggesting a potential upside of 29.45%. Given Albertsons Companies’ higher probable upside, analysts clearly believe Albertsons Companies is more favorable than BJ’s Wholesale Club.

Profitability

This table compares BJ’s Wholesale Club and Albertsons Companies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BJ’s Wholesale Club	2.64%	27.40%	7.69%
Albertsons Companies	0.08%	45.59%	3.83%

Risk and Volatility

BJ’s Wholesale Club has a beta of 0.18, meaning that its stock price is 82% less volatile than the S&P 500. Comparatively, Albertsons Companies has a beta of 0.37, meaning that its stock price is 63% less volatile than the S&P 500.

Earnings and Valuation

This table compares BJ’s Wholesale Club and Albertsons Companies”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BJ’s Wholesale Club	$21.46 billion	0.52	$578.38 million	$4.57	19.38
Albertsons Companies	$83.17 billion	0.07	$217.40 million	$0.08	147.81

BJ’s Wholesale Club has higher earnings, but lower revenue than Albertsons Companies. BJ’s Wholesale Club is trading at a lower price-to-earnings ratio than Albertsons Companies, indicating that it is currently the more affordable of the two stocks.

Summary

BJ’s Wholesale Club beats Albertsons Companies on 8 of the 14 factors compared between the two stocks.

About BJ’s Wholesale Club

BJ’s Wholesale Club Holdings, Inc. engages in the operation of membership warehouse clubs. Its product categories include grocery, household and pet, television and electronics, furniture, computer and tablets, patio and outdoor living, lawn and garden, baby and kids, toys, home, health and beauty, appliances, and jewelry. The company was founded in 1984 and is headquartered in Marlborough, MA.

About Albertsons Companies

Albertsons Companies, Inc., through its subsidiaries, engages in the operation of food and drug stores in the United States. The company’s food and drug retail stores offer grocery products, general merchandise, health and beauty care products, pharmacy, fuel, and other items and services. It also manufactures and processes food products for sale in stores. It operates stores under various banners, including Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Jewel-Osco, Acme, Shaw’s, Star Market, United Supermarkets, Market Street, Haggen, Kings Food Markets, and Balducci’s Food Lovers Market; and pharmacies, in-store branded coffee shops, adjacent fuel centers, distribution centers, and manufacturing facilities, as well as various digital platforms. Albertsons Companies, Inc. was founded in 1860 and is headquartered in Boise, Idaho. Albertsons Companies, Inc. operates as a subsidiary of Albertsons Investor Holdings LLC.