Lowe’s Companies (NYSE:LOW) vs. PetMed Express (NASDAQ:PETS) Critical Analysis

Lowe’s Companies (NYSE:LOW) and PetMed Express (NASDAQ:PETS) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Institutional & Insider Ownership

74.1% of Lowe’s Companies shares are owned by institutional investors. Comparatively, 73.3% of PetMed Express shares are owned by institutional investors. 0.3% of Lowe’s Companies shares are owned by insiders. Comparatively, 1.3% of PetMed Express shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Lowe’s Companies and PetMed Express, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lowe’s Companies	2	11	23	0	2.58
PetMed Express	1	1	0	0	1.50

Lowe’s Companies presently has a consensus target price of $257.63, suggesting a potential upside of 32.35%. Given Lowe’s Companies’ stronger consensus rating and higher possible upside, analysts plainly believe Lowe’s Companies is more favorable than PetMed Express.

Valuation and Earnings

This table compares Lowe’s Companies and PetMed Express”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lowe’s Companies	$90.43 billion	1.21	$6.65 billion	$11.83	16.45
PetMed Express	$179.02 million	0.20	-$57.29 million	($1.38)	-1.17

Lowe’s Companies has higher revenue and earnings than PetMed Express. PetMed Express is trading at a lower price-to-earnings ratio than Lowe’s Companies, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Lowe’s Companies has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500. Comparatively, PetMed Express has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500.

Profitability

This table compares Lowe’s Companies and PetMed Express’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lowe’s Companies	7.34%	-75.67%	12.82%
PetMed Express	-17.34%	-91.69%	-35.15%

Summary

Lowe’s Companies beats PetMed Express on 13 of the 14 factors compared between the two stocks.

About Lowe’s Companies

Lowe’s Companies, Inc., together with its subsidiaries, operates as a home improvement retailer in the United States. The company offers a line of products for construction, maintenance, repair, remodeling, and decorating. It also provides home improvement products, such as appliances, seasonal and outdoor living, lawn and garden, lumber, kitchens and bath, tools, paint, millwork, hardware, flooring, rough plumbing, building materials, décor, and electrical. In addition, the company offers installation services through independent contractors in various product categories; and extended protection plans and repair services. It sells its national brand-name merchandise and private brand products to professional customers, homeowners, renters, businesses, and government. The company also sells its products through Lowes.com website; and through mobile applications. Lowe’s Companies, Inc. was founded in 1921 and is based in Mooresville, North Carolina.

About PetMed Express

PetMed Express, Inc., together with its subsidiaries, operates as a pet pharmacy in the United States. The company markets prescription and non-prescription pet medications, health products, and other supplies for dogs, cats, and horses. It offers non-prescription medications and supplies, such as flea and tick control products, bone and joint care products, vitamins, treats, nutritional supplements, hygiene products, and household pet supplies; and prescription medications, including heartworm preventatives, flea and tick preventatives, arthritis, dermatitis, thyroid, diabetes, pain medications, heart/blood pressure, and other specialty medications, as well as generic substitutes. The company also sells food, beds, crates, stairs, and other pet supplies. It sells its products through its Internet website; mobile app; customer support center; and direct mail/print, which includes brochures and postcards. The company was incorporated in 1996 and is headquartered in Delray Beach, Florida.