Lithia Motors (NYSE:LAD – Get Free Report) and Brilliant Earth Group (NASDAQ:BRLT – Get Free Report) are both consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, profitability, risk, analyst recommendations and dividends.
Profitability
This table compares Lithia Motors and Brilliant Earth Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Lithia Motors | 1.88% | 12.16% | 3.14% |
| Brilliant Earth Group | -0.66% | -15.48% | -5.99% |
Insider & Institutional Ownership
70.4% of Brilliant Earth Group shares are held by institutional investors. 1.1% of Lithia Motors shares are held by company insiders. Comparatively, 83.2% of Brilliant Earth Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Valuation and Earnings
This table compares Lithia Motors and Brilliant Earth Group”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Lithia Motors | $37.63 billion | 0.18 | $819.60 million | $30.15 | 9.95 |
| Brilliant Earth Group | $437.48 million | 0.35 | -$3.63 million | ($0.29) | -5.24 |
Lithia Motors has higher revenue and earnings than Brilliant Earth Group. Brilliant Earth Group is trading at a lower price-to-earnings ratio than Lithia Motors, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Lithia Motors has a beta of 1.27, meaning that its share price is 27% more volatile than the S&P 500. Comparatively, Brilliant Earth Group has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of recent recommendations for Lithia Motors and Brilliant Earth Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Lithia Motors | 0 | 6 | 6 | 0 | 2.50 |
| Brilliant Earth Group | 1 | 7 | 0 | 0 | 1.88 |
Lithia Motors currently has a consensus price target of $402.60, indicating a potential upside of 34.23%. Brilliant Earth Group has a consensus price target of $1.74, indicating a potential upside of 14.31%. Given Lithia Motors’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Lithia Motors is more favorable than Brilliant Earth Group.
Summary
Lithia Motors beats Brilliant Earth Group on 10 of the 14 factors compared between the two stocks.
About Lithia Motors
Lithia Motors, Inc. operates as an automotive retailer worldwide. It operates in two segments, Vehicle Operations and Financing Operations. The company’s Vehicle Operations segment sells new and used vehicles; provides parts, repair, and maintenance services; vehicle finance; and insurance products. Its Financing Operations segment provides financing to customers buying and leasing retail vehicles. The company sells its products and services through the Driveway and Greencars brand names through a network of locations, e-commerce platforms, and captive finance solutions. Lithia Motors, Inc. was founded in 1946 and is headquartered in Medford, Oregon.
About Brilliant Earth Group
Brilliant Earth Group, Inc. designs, procures, and sells diamonds, gemstones, and jewelry in the United States and internationally. The company’s product assortment and merchandise include a collection of diamond engagement rings, wedding and anniversary rings, gemstone rings, and fine jewelry. It sells directly to consumers through its omnichannel sales platform, including e-commerce and showrooms. Brilliant Earth Group, Inc. was founded in 2005 and is headquartered in San Francisco, California.
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