Comparing Lowe’s Companies (NYSE:LOW) and Petco Health and Wellness (NASDAQ:WOOF)

Lowe’s Companies (NYSE:LOW) and Petco Health and Wellness (NASDAQ:WOOF) are both consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, risk, earnings, analyst recommendations and profitability.

Institutional and Insider Ownership

74.1% of Lowe’s Companies shares are owned by institutional investors. 0.3% of Lowe’s Companies shares are owned by insiders. Comparatively, 6.5% of Petco Health and Wellness shares are owned by 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 & Earnings

This table compares Lowe’s Companies and Petco Health and Wellness”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lowe’s Companies	$86.29 billion	1.22	$6.65 billion	$11.83	15.92
Petco Health and Wellness	$5.96 billion	0.13	$9.07 million	$0.10	23.70

Lowe’s Companies has higher revenue and earnings than Petco Health and Wellness. Lowe’s Companies 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.

Volatility & Risk

Lowe’s Companies has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500. Comparatively, Petco Health and Wellness has a beta of 1.59, suggesting that its stock price is 59% more volatile than the S&P 500.

Profitability

This table compares Lowe’s Companies and Petco Health and Wellness’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lowe’s Companies	7.34%	-75.67%	12.82%
Petco Health and Wellness	0.51%	3.44%	0.78%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Lowe’s Companies and Petco Health and Wellness, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lowe’s Companies	2	12	22	1	2.59
Petco Health and Wellness	2	5	1	1	2.11

Lowe’s Companies currently has a consensus price target of $254.29, suggesting a potential upside of 35.00%. Petco Health and Wellness has a consensus price target of $3.42, suggesting a potential upside of 44.30%. Given Petco Health and Wellness’ higher probable upside, analysts clearly believe Petco Health and Wellness is more favorable than Lowe’s Companies.

Summary

Lowe’s Companies beats Petco Health and Wellness on 9 of the 14 factors compared between the two stocks.

About Lowe’s Companies

Lowe’s Companies, Inc., together with its subsidiaries, operates as a home improvement retailer in the United States. The company offers a line of products for construction, maintenance, repair, remodeling, and decorating. It also provides home improvement products, such as appliances, seasonal and outdoor living, lawn and garden, lumber, kitchens and bath, tools, paint, millwork, hardware, flooring, rough plumbing, building materials, décor, and electrical. In addition, the company offers installation services through independent contractors in various product categories; and extended protection plans and repair services. It sells its national brand-name merchandise and private brand products to professional customers, homeowners, renters, businesses, and government. The company also sells its products through Lowes.com website; and through mobile applications. Lowe’s Companies, Inc. was founded in 1921 and is based in Mooresville, North Carolina.

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.