Critical Comparison: National Vision (NASDAQ:EYE) and Grocery Outlet (NASDAQ:GO)

National Vision (NASDAQ:EYE) and Grocery Outlet (NASDAQ:GO) are both consumer staples companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, dividends, valuation, risk, earnings and institutional ownership.

Volatility & Risk

National Vision has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500. Comparatively, Grocery Outlet has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500.

Earnings & Valuation

This table compares National Vision and Grocery Outlet”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
National Vision	$1.99 billion	1.03	$29.60 million	$0.37	69.38
Grocery Outlet	$4.69 billion	0.14	-$224.91 million	($2.29)	-2.99

National Vision has higher earnings, but lower revenue than Grocery Outlet. Grocery Outlet is trading at a lower price-to-earnings ratio than National Vision, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

99.9% of Grocery Outlet shares are held by institutional investors. 2.7% of National Vision shares are held by insiders. Comparatively, 4.5% of Grocery Outlet shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares National Vision and Grocery Outlet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
National Vision	1.49%	5.15%	2.22%
Grocery Outlet	-4.80%	5.93%	2.07%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for National Vision and Grocery Outlet, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
National Vision	0	6	8	0	2.57
Grocery Outlet	2	11	0	0	1.85

National Vision currently has a consensus target price of $31.21, suggesting a potential upside of 21.60%. Grocery Outlet has a consensus target price of $10.68, suggesting a potential upside of 55.83%. Given Grocery Outlet’s higher possible upside, analysts plainly believe Grocery Outlet is more favorable than National Vision.

Summary

National Vision beats Grocery Outlet on 9 of the 14 factors compared between the two stocks.

About National Vision

National Vision Holdings, Inc., through its subsidiaries, operates as an optical retailer in the United States. The company operates in two segments, Owned & Host and Legacy. It offers eyeglasses and contact lenses, and optical accessory products; provides eye exams through its America’s Best, Eyeglass World, Vista Optical, Fred Meyer, and Vista Optical military, as well as Vision Center branded stores; and offers health maintenance organization and optometric services. National Vision Holdings, Inc. was founded in 1990 and is headquartered in Duluth, Georgia.

About Grocery Outlet

Grocery Outlet Holding Corp. operates as a retailer of consumables and fresh products sold through independently operated stores in the United States. Its stores offer products in various categories, such as dairy and deli, produce, floral, fresh meat, seafood products, grocery, general merchandise, health and beauty care, frozen food, beer and wine, and ethnic products. The company was founded in 1946 and is headquartered in Emeryville, California.