Grocery Outlet (NASDAQ:GO) versus Clorox (NYSE:CLX) Financial Analysis

Clorox (NYSE:CLX) and Grocery Outlet (NASDAQ:GO) are both consumer staples companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, risk, profitability, analyst recommendations and institutional ownership.

Risk & Volatility

Clorox has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500. Comparatively, Grocery Outlet has a beta of 0.5, meaning that its share price is 50% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Clorox and Grocery Outlet, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Clorox	3	12	1	0	1.88
Grocery Outlet	2	11	0	0	1.85

Clorox presently has a consensus price target of $118.73, indicating a potential upside of 7.38%. Grocery Outlet has a consensus price target of $10.68, indicating a potential upside of 66.90%. Given Grocery Outlet’s higher possible upside, analysts clearly believe Grocery Outlet is more favorable than Clorox.

Institutional & Insider Ownership

78.5% of Clorox shares are held by institutional investors. Comparatively, 99.9% of Grocery Outlet shares are held by institutional investors. 0.6% of Clorox shares are held by company insiders. Comparatively, 4.5% of Grocery Outlet shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Clorox and Grocery Outlet”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Clorox	$7.10 billion	1.88	$810.00 million	$6.12	18.07
Grocery Outlet	$4.69 billion	0.13	-$224.91 million	($2.29)	-2.79

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Clorox	11.17%	383.01%	14.57%
Grocery Outlet	-4.80%	5.93%	2.07%

Summary

Clorox beats Grocery Outlet on 11 of the 14 factors compared between the two stocks.

About Clorox

The Clorox Company manufactures and markets consumer and professional products worldwide. It operates through four segments: Health and Wellness, Household, Lifestyle, and International. The Health and Wellness segment offers cleaning products, such as laundry additives and home care products primarily under the Clorox, Clorox2, Scentiva, Pine-Sol, Liquid-Plumr, Tilex, and Formula 409 brands; professional cleaning and disinfecting products under the CloroxPro and Clorox Healthcare brands; professional food service products under the Hidden Valley brand; and vitamins, minerals and supplement products under the RenewLife, Natural Vitality, NeoCell, and Rainbow Light brands in the United States. The Household segment provides cat litter products under the Fresh Step and Scoop Away brands; bags and wraps under the Glad brand; and grilling products under the Kingsford brand in the United States. The Lifestyle segment offers dressings, dips, seasonings, and sauces primarily under the Hidden Valley brand; natural personal care products under the Burt's Bees brand; and water-filtration products under the Brita brand in the United States. The International segment provides laundry additives; home care products; water-filtration systems; digestive health products; grilling products; cat litter products; food products; bags and wraps; natural personal care products; and professional cleaning and disinfecting products internationally primarily under the Clorox, Ayudin, Clorinda, Poett, Pine-Sol, Glad, Brita, RenewLife, Ever Clean and Burt's Bees brands. It sells its products primarily through mass retailers; grocery outlets; warehouse clubs; dollar stores; home hardware centers; drug, pet, and military stores; third-party and owned e-commerce channels; and distributors, as well as a direct sales force The Clorox Company was founded in 1913 and is headquartered in Oakland, California.

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.