Financial Contrast: Valvoline (NYSE:VVV) vs. O’Reilly Automotive (NASDAQ:ORLY)

Valvoline (NYSE:VVV) and O’Reilly Automotive (NASDAQ:ORLY) are both retail/wholesale companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, analyst recommendations, earnings, dividends and profitability.

Earnings and Valuation

This table compares Valvoline and O’Reilly Automotive”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Valvoline	$1.62 billion	2.99	$211.50 million	$2.06	18.46
O’Reilly Automotive	$16.87 billion	4.72	$2.39 billion	$2.72	34.24

O’Reilly Automotive has higher revenue and earnings than Valvoline. Valvoline is trading at a lower price-to-earnings ratio than O’Reilly Automotive, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Valvoline and O’Reilly Automotive’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Valvoline	15.97%	106.36%	8.52%
O’Reilly Automotive	14.10%	-167.25%	16.26%

Volatility & Risk

Valvoline has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500. Comparatively, O’Reilly Automotive has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500.

Insider & Institutional Ownership

96.1% of Valvoline shares are owned by institutional investors. Comparatively, 85.0% of O’Reilly Automotive shares are owned by institutional investors. 0.7% of Valvoline shares are owned by company insiders. Comparatively, 1.0% of O’Reilly Automotive shares are owned by company 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 summary of current recommendations and price targets for Valvoline and O’Reilly Automotive, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Valvoline	0	5	9	1	2.73
O’Reilly Automotive	0	2	14	2	3.00

Valvoline presently has a consensus target price of $42.54, suggesting a potential upside of 11.86%. O’Reilly Automotive has a consensus target price of $94.38, suggesting a potential upside of 1.35%. Given Valvoline’s higher probable upside, equities analysts plainly believe Valvoline is more favorable than O’Reilly Automotive.

Summary

O’Reilly Automotive beats Valvoline on 10 of the 15 factors compared between the two stocks.

About Valvoline

Valvoline Inc. engages in the operation and franchising of vehicle service centers and retail stores in the United States and Canada. The company, through its service centers, provides fluid exchange for motor oil, transmission and differential fluid, and coolant; parts replacement for batteries, filters, wiper blades, and belts; and safety services, such as tire inflation and rotation, bulbs, and safety checks. It offers its services for passenger cars, hybrid and battery electric vehicles, and light and medium duty vehicles. The company was founded in 1866 and is headquartered in Lexington, Kentucky.

About O’Reilly Automotive

O’Reilly Automotive, Inc., together with its subsidiaries, operates as a retailer and supplier of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States, Puerto Rico, and Mexico. The company provides new and remanufactured automotive hard parts and maintenance items, such as alternators, batteries, brake system components, belts, chassis parts, driveline parts, engine parts, fuel pumps, hoses, starters, temperature control, water pumps, antifreeze, appearance products, engine additives, filters, fluids, lighting products, and oil and wiper blades; and accessories, including floor mats, seat covers, and truck accessories. It also offers auto body paint and related materials, automotive tools, and professional service provider service equipment. In addition, the company provide enhanced services and programs comprising used oil, oil filter, and battery recycling; battery, wiper, and bulb replacement; battery diagnostic testing; electrical and module testing; check engine light code extraction; loaner tool program; drum and rotor resurfacing; custom hydraulic hoses; and professional paint shop mixing and related materials. Further, it offers do-it-yourself and professional service for domestic and imported automobiles, vans, and trucks. The company was founded in 1957 and is headquartered in Springfield, Missouri.