Lithia Motors (NYSE:LAD – Get Free Report) and Barnes & Noble Education (NYSE:BNED – Get Free Report) are both consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, earnings, institutional ownership, profitability and dividends.
Profitability
This table compares Lithia Motors and Barnes & Noble Education’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Lithia Motors | 2.06% | 12.05% | 3.03% |
| Barnes & Noble Education | 1.29% | 8.77% | 2.66% |
Analyst Ratings
This is a breakdown of recent ratings and target prices for Lithia Motors and Barnes & Noble Education, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Lithia Motors | 0 | 6 | 6 | 0 | 2.50 |
| Barnes & Noble Education | 1 | 0 | 2 | 1 | 2.75 |
Lithia Motors currently has a consensus target price of $393.80, suggesting a potential upside of 27.50%. Barnes & Noble Education has a consensus target price of $17.25, suggesting a potential upside of 34.66%. Given Barnes & Noble Education’s stronger consensus rating and higher probable upside, analysts clearly believe Barnes & Noble Education is more favorable than Lithia Motors.
Dividends
Lithia Motors pays an annual dividend of $2.80 per share and has a dividend yield of 0.9%. Barnes & Noble Education pays an annual dividend of $0.32 per share and has a dividend yield of 2.5%. Lithia Motors pays out 8.1% of its earnings in the form of a dividend. Barnes & Noble Education pays out 50.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Lithia Motors has raised its dividend for 16 consecutive years.
Earnings & Valuation
This table compares Lithia Motors and Barnes & Noble Education”s revenue, earnings per share (EPS) 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 | $34.76 | 8.89 |
| Barnes & Noble Education | $1.71 billion | 0.26 | $16.87 million | $0.64 | 20.02 |
Lithia Motors has higher revenue and earnings than Barnes & Noble Education. Lithia Motors is trading at a lower price-to-earnings ratio than Barnes & Noble Education, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
38.5% of Barnes & Noble Education shares are held by institutional investors. 1.1% of Lithia Motors shares are held by company insiders. Comparatively, 1.7% of Barnes & Noble Education shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Risk & Volatility
Lithia Motors has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500. Comparatively, Barnes & Noble Education has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500.
About Lithia Motors
Lithia Motors, Inc. is an automotive retailer that sells new and pre-owned vehicles through a network of franchised dealerships. Its dealerships represent a range of vehicle manufacturers and also offer related products and services, including parts, maintenance and repairs, and vehicle financing and insurance options. The company traces its roots to a single dealership established in Ashland, Oregon, in 1946. It has since expanded its retail operations across the United States, Canada and the United Kingdom.
About Barnes & Noble Education
Barnes & Noble Education, Inc. (NYSE: BNED) is an education solutions company that supports colleges and universities, their students, faculty and campus communities. The company operates and manages college bookstores and provides higher-education institutions with products and services designed to support academic success and campus life. BNED’s offerings include new, used, rental and digital course materials; textbook and course-material fulfillment; general merchandise; school supplies; technology products; and custom or institution-branded apparel and gifts.
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