Critical Survey: Driven Brands (NASDAQ:DRVN) versus ARKO (NASDAQ:ARKO)

Driven Brands (NASDAQ:DRVN) and ARKO (NASDAQ:ARKO) are both consumer discretionary 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.

Earnings and Valuation

This table compares Driven Brands and ARKO”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Driven Brands	$1.86 billion	1.11	$140.16 million	$1.04	12.06
ARKO	$7.64 billion	0.07	$22.74 million	$0.07	67.71

Driven Brands has higher earnings, but lower revenue than ARKO. Driven Brands is trading at a lower price-to-earnings ratio than ARKO, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

77.1% of Driven Brands shares are owned by institutional investors. Comparatively, 78.3% of ARKO shares are owned by institutional investors. 4.4% of Driven Brands shares are owned by company insiders. Comparatively, 21.9% of ARKO 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.

Volatility and Risk

Driven Brands has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500. Comparatively, ARKO has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Driven Brands and ARKO, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Driven Brands	1	6	5	2	2.57
ARKO	1	1	1	0	2.00

Driven Brands currently has a consensus price target of $16.77, suggesting a potential upside of 33.77%. ARKO has a consensus price target of $14.50, suggesting a potential upside of 205.91%. Given ARKO’s higher possible upside, analysts plainly believe ARKO is more favorable than Driven Brands.

Profitability

This table compares Driven Brands and ARKO’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Driven Brands	8.61%	24.13%	5.03%
ARKO	0.19%	4.02%	0.41%

Summary

Driven Brands beats ARKO on 9 of the 15 factors compared between the two stocks.

About Driven Brands

Driven Brands Holdings Inc., together with its subsidiaries, provides automotive services to retail and commercial customers in the United States, Canada, and internationally. It offers various services, such as paint, collision, glass, repair, car wash, oil change, and maintenance services. The company also distributes automotive parts, including radiators, air conditioning components, and exhaust products to automotive repair shops, auto parts stores, body shops, and other auto repair outlets; windshields and glass accessories through a network of distribution centers; and consumable products, such as oil filters and wiper blades, as well as training services to repair and maintenance, and paint and collision shops. It sells its products and services under the CARSTAR, IMO, MAACO, Meineke Car Care Centers, PH Vitres D’Autos, Take 5 Oil Change, Take 5 Car Wash, Auto Glass Now, Fix Auto USA, and 1-800-Radiator & A/C, Spire Supply, and Automotive Training Institute brands. The company was founded in 1972 and is headquartered in Charlotte, North Carolina.

About ARKO

Arko Corp. operates convenience stores in the United States. It operates through Retail, Wholesale, Fleet Fueling, and GPMP segments. The Retail segment engages in the sale of fuel and merchandise to retail consumers. Its Wholesale segment supplies fuel to third-party dealers and consignment agents. The Fleet Fueling segment supplies fuel to proprietary and third-party cardlock, and issuance of proprietary fuel cards. Its GPMP segment supplies fuel to retail and wholesale segments. The company is based in Richmond, Virginia.