Ross Stores (NASDAQ:ROST – Get Free Report) and Petco Health and Wellness (NASDAQ:WOOF – Get Free Report) are both consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, analyst recommendations, earnings and valuation.
Analyst Ratings
This is a breakdown of current ratings and recommmendations for Ross Stores and Petco Health and Wellness, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ross Stores | 0 | 6 | 15 | 0 | 2.71 |
| Petco Health and Wellness | 1 | 6 | 1 | 0 | 2.00 |
Ross Stores presently has a consensus price target of $263.76, suggesting a potential upside of 14.60%. Petco Health and Wellness has a consensus price target of $3.72, suggesting a potential upside of 37.18%. Given Petco Health and Wellness’ higher probable upside, analysts clearly believe Petco Health and Wellness is more favorable than Ross Stores.
Risk & Volatility
Institutional and Insider Ownership
86.9% of Ross Stores shares are held by institutional investors. 2.1% of Ross Stores shares are held by insiders. Comparatively, 6.5% of Petco Health and Wellness shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Profitability
This table compares Ross Stores and Petco Health and Wellness’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ross Stores | 10.85% | 39.29% | 15.79% |
| Petco Health and Wellness | 0.09% | 1.36% | 0.30% |
Earnings and Valuation
This table compares Ross Stores and Petco Health and Wellness”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Ross Stores | $24.51 billion | 3.01 | $2.15 billion | $8.26 | 27.87 |
| Petco Health and Wellness | $5.96 billion | 0.15 | $9.07 million | $0.02 | 135.65 |
Ross Stores has higher revenue and earnings than Petco Health and Wellness. Ross Stores is trading at a lower price-to-earnings ratio than Petco Health and Wellness, indicating that it is currently the more affordable of the two stocks.
Summary
Ross Stores beats Petco Health and Wellness on 10 of the 14 factors compared between the two stocks.
About Ross Stores
Ross Stores, Inc., together with its subsidiaries, operates off-price retail apparel and home fashion stores under the Ross Dress for Less and dd’s DISCOUNTS brand names in the United States. Its stores primarily offer apparel, accessories, footwear, and home fashions. The company’s Ross Dress for Less stores sell its products at department and specialty stores to middle income households; and dd’s DISCOUNTS stores sell its products at department and discount stores for households with moderate income. Ross Stores, Inc. was incorporated in 1957 and is headquartered in Dublin, California.
About Petco Health and Wellness
Petco Health and Wellness Company, Inc., operates as a health and wellness company, focuses on enhancing the lives of pets, pet parents, and its Petco partners in the United States, Mexico, and Puerto Rico. The company provides veterinary care, grooming, training, tele-health, and Vital Care and pet health insurance services, as well as veterinary services through Vetco mobile clinics. It also offers pet consumables, supplies, and services through its petco.com, petcoach.co, petinsurancequotes.com, and pupbox.com websites. The company offers its products under the WholeHearted, Reddy, and Well & Good brands. Petco Health and Wellness Company, Inc. was founded in 1965 and is headquartered in San Diego, California.
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