Financial Contrast: Ollie’s Bargain Outlet (NASDAQ:OLLI) and Grocery Outlet (NASDAQ:GO)

Grocery Outlet (NASDAQ:GO) and Ollie’s Bargain Outlet (NASDAQ:OLLI) are both consumer staples companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, dividends, earnings, profitability, valuation, institutional ownership and analyst recommendations.

Insider & Institutional Ownership

99.9% of Grocery Outlet shares are owned by institutional investors. 4.5% of Grocery Outlet shares are owned by insiders. Comparatively, 0.8% of Ollie’s Bargain Outlet shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Volatility & Risk

Grocery Outlet has a beta of 0.33, suggesting that its share price is 67% less volatile than the S&P 500. Comparatively, Ollie’s Bargain Outlet has a beta of 0.41, suggesting that its share price is 59% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Grocery Outlet	-0.10%	5.86%	2.13%
Ollie’s Bargain Outlet	8.74%	12.66%	8.20%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Grocery Outlet and Ollie’s Bargain Outlet, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Grocery Outlet	2	7	3	1	2.23
Ollie’s Bargain Outlet	0	5	9	0	2.64

Grocery Outlet currently has a consensus price target of $15.73, suggesting a potential upside of 39.80%. Ollie’s Bargain Outlet has a consensus price target of $144.00, suggesting a potential upside of 15.50%. Given Grocery Outlet’s higher possible upside, equities research analysts clearly believe Grocery Outlet is more favorable than Ollie’s Bargain Outlet.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Grocery Outlet	$4.37 billion	0.25	$39.47 million	($0.05)	-225.00
Ollie’s Bargain Outlet	$2.27 billion	3.36	$199.76 million	$3.45	36.14

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

Summary

Ollie’s Bargain Outlet beats Grocery Outlet on 10 of the 15 factors compared between the two stocks.

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.

About Ollie’s Bargain Outlet

Ollie’s Bargain Outlet Holdings, Inc. is a holding company, which engages in the retail of closeouts, excess inventory, and salvage merchandise. It offers overstocks, package changes, manufacturer refurbished goods, and irregulars. The company’s products include housewares, food, books and stationery, bed and bath, floor coverings, electronics and toys. Ollie’s Bargain Outlet Holdings was founded by Mark Butler, Mort Bernstein, Oliver Rosenberg and Harry Coverman on July 29, 1982, and is headquartered in Harrisburg, PA.