Head to Head Survey: Driven Brands (NASDAQ:DRVN) and AutoZone (NYSE:AZO)

Driven Brands (NASDAQ:DRVN) and AutoZone (NYSE:AZO) are both retail/wholesale companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, profitability, institutional ownership, valuation, dividends, analyst recommendations and risk.

Institutional and Insider Ownership

77.1% of Driven Brands shares are owned by institutional investors. Comparatively, 92.7% of AutoZone shares are owned by institutional investors. 2.3% of Driven Brands shares are owned by insiders. Comparatively, 2.1% of AutoZone shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Driven Brands and AutoZone”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Driven Brands	$2.34 billion	1.27	-$292.50 million	($1.81)	-9.98
AutoZone	$18.49 billion	3.33	$2.66 billion	$147.75	24.82

AutoZone has higher revenue and earnings than Driven Brands. Driven Brands is trading at a lower price-to-earnings ratio than AutoZone, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Driven Brands and AutoZone’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Driven Brands	-12.75%	19.61%	2.79%
AutoZone	13.56%	-56.07%	14.02%

Risk & Volatility

Driven Brands has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500. Comparatively, AutoZone has a beta of 0.39, suggesting that its share price is 61% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Driven Brands and AutoZone, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Driven Brands	0	3	7	1	2.82
AutoZone	0	2	18	3	3.04

Driven Brands currently has a consensus target price of $21.00, indicating a potential upside of 16.31%. AutoZone has a consensus target price of $4,087.00, indicating a potential upside of 11.45%. Given Driven Brands’ higher probable upside, analysts plainly believe Driven Brands is more favorable than AutoZone.

Summary

AutoZone beats Driven Brands on 11 of the 15 factors compared between the two stocks.

About Driven Brands

Driven Brands Holdings Inc., together with its subsidiaries, provides automotive services to retail and commercial customers in the United States, Canada, and internationally. It offers various services, such as paint, collision, glass, repair, car wash, oil change, and maintenance services. The company also distributes automotive parts, including radiators, air conditioning components, and exhaust products to automotive repair shops, auto parts stores, body shops, and other auto repair outlets; windshields and glass accessories through a network of distribution centers; and consumable products, such as oil filters and wiper blades, as well as training services to repair and maintenance, and paint and collision shops. It sells its products and services under the CARSTAR, IMO, MAACO, Meineke Car Care Centers, PH Vitres D’Autos, Take 5 Oil Change, Take 5 Car Wash, Auto Glass Now, Fix Auto USA, and 1-800-Radiator & A/C, Spire Supply, and Automotive Training Institute brands. The company was founded in 1972 and is headquartered in Charlotte, North Carolina.

About AutoZone

AutoZone, Inc. retails and distributes automotive replacement parts and accessories in the United States, Mexico, and Brazil. The company provides various products for cars, sport utility vehicles, vans, and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. It also offers A/C compressors, batteries and accessories, bearings, belts and hoses, calipers, chassis, clutches, CV axles, engines, fuel pumps, fuses, ignition and lighting products, mufflers, radiators, starters and alternators, thermostats, and water pumps, as well as tire repairs. In addition, the company provides maintenance products, such as antifreeze and windshield washer fluids; brake drums, rotors, shoes, and pads; brake and power steering fluids, and oil and fuel additives; oil and transmission fluids; oil, cabin, air, fuel, and transmission filters; oxygen sensors; paints and accessories; refrigerants and accessories; shock absorbers and struts; spark plugs and wires; and windshield wipers. Further, it offers air fresheners, cell phone accessories, drinks and snacks, floor mats and seat covers, interior and exterior accessories, mirrors, performance products, protectants and cleaners, sealants and adhesives, steering wheel covers, tools, vehicle entertainment systems, and wash and wax products, as well as towing services. Additionally, the company provides a sales program that offers commercial credit and delivery of parts and other products; sells automotive diagnostic and repair software under the ALLDATA brand through alldata.com and alldatadiy.com; and automotive hard parts, maintenance items, accessories, and non-automotive products through autozone.com. AutoZone, Inc. was founded in 1979 and is headquartered in Memphis, Tennessee.