CarMax (NYSE:KMX – Get Free Report) and DICK’S Sporting Goods (NYSE:DKS – Get Free Report) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, risk, earnings, dividends and institutional ownership.
Analyst Ratings
This is a breakdown of current recommendations for CarMax and DICK’S Sporting Goods, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| CarMax | 3 | 14 | 2 | 1 | 2.05 |
| DICK’S Sporting Goods | 1 | 4 | 12 | 1 | 2.72 |
CarMax presently has a consensus price target of $51.00, indicating a potential downside of 20.53%. DICK’S Sporting Goods has a consensus price target of $243.65, indicating a potential upside of 96.00%. Given DICK’S Sporting Goods’ stronger consensus rating and higher probable upside, analysts clearly believe DICK’S Sporting Goods is more favorable than CarMax.
Institutional and Insider Ownership
Profitability
This table compares CarMax and DICK’S Sporting Goods’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| CarMax | 0.84% | 6.64% | 1.53% |
| DICK’S Sporting Goods | 4.71% | 22.22% | 7.02% |
Valuation and Earnings
This table compares CarMax and DICK’S Sporting Goods”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| CarMax | $25.88 billion | 0.35 | $247.29 million | $1.53 | 41.94 |
| DICK’S Sporting Goods | $17.22 billion | 0.65 | $849.24 million | $10.52 | 11.82 |
DICK’S Sporting Goods has lower revenue, but higher earnings than CarMax. DICK’S Sporting Goods is trading at a lower price-to-earnings ratio than CarMax, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
CarMax has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500. Comparatively, DICK’S Sporting Goods has a beta of 1.21, indicating that its stock price is 21% more volatile than the S&P 500.
Summary
DICK’S Sporting Goods beats CarMax on 12 of the 14 factors compared between the two stocks.
About CarMax
CarMax, Inc., through its subsidiaries, operates as a retailer of used vehicles and related products in the United States. It operates in two segments: CarMax Sales Operations and CarMax Auto Finance. The CarMax Sales Operations segment offers customers a range of makes and models of used vehicles, including domestic, imported, and luxury vehicles, as well as hybrid and electric vehicles; used vehicle auctions; extended protection plans to customers at the time of sale; and reconditioning and vehicle repair services. The CarMax Auto Finance segment provides financing alternatives for retail customers across a range of credit spectrum and arrangements with various financial institutions. The company was founded in 1993 and is based in Richmond, Virginia.
About DICK’S Sporting Goods
DICK’s Sporting Goods, Inc. engages in the retailing of an extensive assortment of authentic sports equipment, apparel, footwear, and accessories. It also offers its products both online and through mobile applications. The company was founded by Richard T. Stack in 1948 and is headquartered in Coraopolis, PA.
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