Critical Contrast: ODP (NASDAQ:ODP) and Tractor Supply (NASDAQ:TSCO)

Tractor Supply (NASDAQ:TSCO) and ODP (NASDAQ:ODP) are both retail/wholesale companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, valuation, risk, dividends, institutional ownership, analyst recommendations and earnings.

Analyst Ratings

This is a summary of recent ratings and price targets for Tractor Supply and ODP, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tractor Supply	0	6	15	0	2.71
ODP	1	2	0	0	1.67

Tractor Supply presently has a consensus target price of $63.95, suggesting a potential upside of 21.48%. ODP has a consensus target price of $28.00, suggesting a potential upside of 0.50%. Given Tractor Supply’s stronger consensus rating and higher possible upside, equities analysts clearly believe Tractor Supply is more favorable than ODP.

Risk & Volatility

Tractor Supply has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500. Comparatively, ODP has a beta of 1.43, suggesting that its share price is 43% more volatile than the S&P 500.

Institutional and Insider Ownership

98.7% of Tractor Supply shares are owned by institutional investors. Comparatively, 99.6% of ODP shares are owned by institutional investors. 0.7% of Tractor Supply shares are owned by insiders. Comparatively, 3.6% of ODP shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Tractor Supply pays an annual dividend of $0.92 per share and has a dividend yield of 1.7%. ODP pays an annual dividend of $0.10 per share and has a dividend yield of 0.4%. Tractor Supply pays out 44.2% of its earnings in the form of a dividend. ODP pays out -28.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Tractor Supply has raised its dividend for 16 consecutive years. Tractor Supply is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Tractor Supply and ODP’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tractor Supply	7.18%	46.18%	10.62%
ODP	0.39%	11.22%	2.58%

Valuation and Earnings

This table compares Tractor Supply and ODP”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tractor Supply	$14.88 billion	1.87	$1.10 billion	$2.08	25.31
ODP	$6.53 billion	0.13	-$3.00 million	($0.35)	-79.60

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

Summary

Tractor Supply beats ODP on 12 of the 17 factors compared between the two stocks.

About Tractor Supply

Tractor Supply Company operates as a rural lifestyle retailer in the United States. The company offers various merchandise, including livestock and equine feed and equipment, poultry, fencing, and sprayers and chemicals; food, treats, and equipment for dogs, cats, and other small animals, as well as dog wellness products; seasonal and recreation products comprising tractors and riders, lawn and garden, bird feeding, power equipment, and other recreational products; truck, tool, and hardware products, such as truck accessories, trailers, generators, lubricants, batteries, and hardware and tools; and clothing, gift, and décor products consist of clothing, footwear, toys, snacks, and decorative merchandise. It provides its products under the 4health, Paws & Claws, American Farmworks, Producer's Pride, Bit & Bridle, Red Shed, Blue Mountain, Redstone, C.E. Schmidt, Retriever, Country Lane, Ridgecut, Countyline, Royal Wing, Country Tuff, Strive, Dumor, Traveller, Farm Table, Treeline, Groundwork, TSC Tractor Supply Co, Huskee, Untamed, and JobSmart brand names. The company operates its retail stores under the Tractor Supply Company, Petsense by Tractor Supply, and Orscheln Farm and Home names; and operates websites under the TractorSupply.com and Petsense.com names. It sells its products to recreational farmers, ranchers, and others. Tractor Supply Company was founded in 1938 and is based in Brentwood, Tennessee.

About ODP

The ODP Corporation provides business services and supplies, products, and digital workplace technology solutions for small, medium, and enterprise businesses in the United States, Puerto Rico, and the U.S. Virgin Islands. The company operates through four divisions: ODP Business Solutions, Office Depot, Veyer, and Varis. The ODP Business Solutions division offers adjacency products, including cleaning, janitorial, and breakroom supplies, office furniture, technology products; and copy and print services through sales force, catalogs, telesales, and through Internet websites. This segment also engages in office supply distribution business. The Office Depot division sells office supplies, technology products and solutions, business machines and related supplies, cleaning, breakroom and facilities products, personal protective equipment, and office furniture; and offers business services, including copying, printing, digital imaging, mailing, shipping, and technology support services through a fully integrated omni-channel platform of 980 Office Depot and OfficeMax retail stores, and through www.officedepot.com. The Veyer division engages in supply chain, distribution, procurement, and global sourcing operations. The Varis division operates tech-enabled B2B indirect procurement marketplace, where buyers and suppliers to transact through the platform's consumer-like buying experience, advanced spend management tools, network of suppliers, and technology capabilities. The company offers its products under various brands, including Office Depot, OfficeMax, and Grand&Toy, as well as others. The ODP Corporation was incorporated in 1986 and is headquartered in Boca Raton, Florida.