Reviewing WD-40 (NASDAQ:WDFC) and Grocery Outlet (NASDAQ:GO)

Grocery Outlet (NASDAQ:GO) and WD-40 (NASDAQ:WDFC) are both consumer staples companies, but which is the better business? We will compare the two businesses based on the strength of their risk, profitability, earnings, dividends, institutional ownership, analyst recommendations and valuation.

Analyst Ratings

This is a breakdown of recent ratings for Grocery Outlet and WD-40, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Grocery Outlet	2	11	0	0	1.85
WD-40	0	2	2	2	3.00

Grocery Outlet currently has a consensus price target of $10.32, suggesting a potential upside of 9.43%. WD-40 has a consensus price target of $305.00, suggesting a potential upside of 30.80%. Given WD-40’s stronger consensus rating and higher possible upside, analysts plainly believe WD-40 is more favorable than Grocery Outlet.

Profitability

This table compares Grocery Outlet and WD-40’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Grocery Outlet	-8.08%	5.69%	1.86%
WD-40	13.23%	33.53%	18.97%

Valuation and Earnings

This table compares Grocery Outlet and WD-40″s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Grocery Outlet	$4.69 billion	0.20	-$224.91 million	($3.88)	-2.43
WD-40	$619.98 million	5.05	$90.99 million	$6.58	35.44

WD-40 has lower revenue, but higher earnings than Grocery Outlet. Grocery Outlet is trading at a lower price-to-earnings ratio than WD-40, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Grocery Outlet has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500. Comparatively, WD-40 has a beta of 0.26, meaning that its share price is 74% less volatile than the S&P 500.

Insider and Institutional Ownership

99.9% of Grocery Outlet shares are owned by institutional investors. Comparatively, 91.5% of WD-40 shares are owned by institutional investors. 5.6% of Grocery Outlet shares are owned by company insiders. Comparatively, 0.8% of WD-40 shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

WD-40 beats Grocery Outlet on 11 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 WD-40

WD-40 Company develops and sells maintenance products, and homecare and cleaning products in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company provides multi-purpose maintenance products that include aerosol sprays, non-aerosol trigger sprays, precision pens, and in liquid-bulk form products under the WD-40 Multi-Use brand name; specialty maintenance products, such as penetrants, degreasers, corrosion inhibitors, greases, lubricants, and rust removers under the WD-40 Specialist brand; and bike-specific products. It also offers multi-purpose and specialty drip oils, and spray lubricant products, as well as other specialty maintenance products under the 3-IN-ONE brand name; and professional spray maintenance products and lubricants for the bike maintenance market under the GT85 brand name. In addition, the company provides automatic toilet bowl cleaners under the 2000 Flushes brand name; aerosol and liquid trigger carpet stain and odor eliminators under the Spot Shot brand; room and rug deodorizers under the Carpet Fresh brand name; carpet and household cleaners, and rug and room deodorizers under the 1001 brand; heavy-duty hand cleaner products under the Lava brand name in the United States, as well as under the Solvol brand name in Australia; and automatic toilet bowl cleaners under the X-14 brand name. It sells its products primarily through warehouse club stores, hardware stores, automotive parts outlets, industrial distributors and suppliers, mass retail and home center stores, value retailers, grocery stores, online retailers, farm supply, sport retailers, and independent bike dealers. WD-40 Company was founded in 1953 and is headquartered in San Diego, California.