Head-To-Head Review: BJ’s Wholesale Club (NYSE:BJ) and Colgate-Palmolive (NYSE:CL)

Colgate-Palmolive (NYSE:CL) and BJ’s Wholesale Club (NYSE:BJ) are both large-cap consumer staples companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, profitability, dividends, analyst recommendations, valuation and institutional ownership.

Analyst Recommendations

This is a summary of recent ratings and price targets for Colgate-Palmolive and BJ’s Wholesale Club, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Colgate-Palmolive	1	9	7	0	2.35
BJ’s Wholesale Club	0	8	11	0	2.58

Colgate-Palmolive presently has a consensus target price of $100.64, indicating a potential upside of 15.84%. BJ’s Wholesale Club has a consensus target price of $116.12, indicating a potential upside of 10.99%. Given Colgate-Palmolive’s higher possible upside, research analysts clearly believe Colgate-Palmolive is more favorable than BJ’s Wholesale Club.

Earnings and Valuation

This table compares Colgate-Palmolive and BJ’s Wholesale Club”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Colgate-Palmolive	$20.10 billion	3.50	$2.89 billion	$3.54	24.54
BJ’s Wholesale Club	$20.50 billion	0.67	$534.42 million	$4.30	24.33

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

Institutional & Insider Ownership

80.4% of Colgate-Palmolive shares are held by institutional investors. Comparatively, 98.6% of BJ’s Wholesale Club shares are held by institutional investors. 0.3% of Colgate-Palmolive shares are held by company insiders. Comparatively, 1.4% of BJ’s Wholesale Club shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

Colgate-Palmolive has a beta of 0.37, meaning that its share price is 63% less volatile than the S&P 500. Comparatively, BJ’s Wholesale Club has a beta of 0.45, meaning that its share price is 55% less volatile than the S&P 500.

Profitability

This table compares Colgate-Palmolive and BJ’s Wholesale Club’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Colgate-Palmolive	14.52%	461.04%	18.14%
BJ’s Wholesale Club	2.76%	31.98%	8.16%

About Colgate-Palmolive

Colgate-Palmolive Company, together with its subsidiaries, manufactures and sells consumer products in the United States and internationally. It operates through two segments: Oral, Personal and Home Care; and Pet Nutrition. The Oral, Personal and Home Care segment offers toothpaste, toothbrushes, mouthwash, bar and liquid hand soaps, shower gels, shampoos, conditioners, deodorants and antiperspirants, skin health products, dishwashing detergents, fabric conditioners, household cleaners, and other related items. This segment markets and sells its products under various brands, which include Colgate, Darlie, elmex, hello, meridol, Sorriso, Tom's of Maine, Irish Spring, Palmolive, Protex, Sanex, Softsoap, Lady Speed Stick, Speed Stick, EltaMD, Filorga, PCA SKIN, Ajax, Axion, Fabuloso, Murphy, Suavitel, and Soupline to a range of traditional and eCommerce retailers, wholesalers, and distributors. It includes pharmaceutical products for dentists and other oral health professionals. Its Pet Nutrition segment offers pet nutrition products for everyday nutritional needs under the Hill's Science Diet brand; and a range of therapeutic pet products to help nutritionally support dogs and cats in different stages of health under the Hill's Prescription Diet brand. This segment markets and sells its products through pet supply retailers, veterinarians, and eCommerce retailers. Colgate-Palmolive Company was founded in 1806 and is headquartered in New York, New York.

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.