Analyzing Rite Aid Corporation (RAD) & PetMed Express (PETS)

PetMed Express (NASDAQ: PETS) and Rite Aid Corporation (NYSE:RAD) are both retail/wholesale companies, but which is the better business? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, profitabiliy, institutional ownership, dividends and valuation.

Risk and Volatility

PetMed Express has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500. Comparatively, Rite Aid Corporation has a beta of 1.87, meaning that its stock price is 87% more volatile than the S&P 500.

Insider & Institutional Ownership

78.5% of PetMed Express shares are held by institutional investors. Comparatively, 56.9% of Rite Aid Corporation shares are held by institutional investors. 4.0% of PetMed Express shares are held by company insiders. Comparatively, 2.3% of Rite Aid Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares PetMed Express and Rite Aid Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PetMed Express 9.56% 26.69% 23.42%
Rite Aid Corporation -0.21% 0.52% 0.03%

Dividends

PetMed Express pays an annual dividend of $0.80 per share and has a dividend yield of 2.0%. Rite Aid Corporation does not pay a dividend. PetMed Express pays out 68.4% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of current ratings and recommmendations for PetMed Express and Rite Aid Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PetMed Express 1 1 0 0 1.50
Rite Aid Corporation 2 2 3 0 2.14

PetMed Express presently has a consensus price target of $13.00, indicating a potential downside of 67.26%. Rite Aid Corporation has a consensus price target of $4.83, indicating a potential upside of 107.08%. Given Rite Aid Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe Rite Aid Corporation is more favorable than PetMed Express.

Earnings and Valuation

This table compares PetMed Express and Rite Aid Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
PetMed Express $249.18 million 3.27 $38.85 million $1.17 33.94
Rite Aid Corporation $32.44 billion 0.08 $999.93 million ($0.07) -33.28

Rite Aid Corporation has higher revenue and earnings than PetMed Express. Rite Aid Corporation is trading at a lower price-to-earnings ratio than PetMed Express, indicating that it is currently the more affordable of the two stocks.

Summary

PetMed Express beats Rite Aid Corporation on 8 of the 15 factors compared between the two stocks.

About PetMed Express

PetMed Express, Inc. (PetMed Express), doing business as 1800PetMeds, is a pet pharmacy. The Company markets prescription and non-prescription pet medications, and other health products for dogs and cats, direct to the consumer. It offers a selection of products for dogs and cats. Its product line contains approximately 3,000 stock keeping units (SKUS) of pet medications, health products and supplies. Its products include brands of medication, such as Frontline Plus, K9 Advantix II, Advantage II, Heartgard Plus, Sentinel, Revolution and Rimadyl. It also offers additional pet supplies for sale on its Website, which are drop shipped to its customers by third parties. These pet supplies include food, beds, crates, stairs, strollers and other pet supplies. Its products included Non-Prescription Medications (Over the Counter (OTC)) and supplies, and Prescription Medications (Rx). Its customers are located in California, Florida, Texas, New York, Virginia and Georgia, among others.

About Rite Aid Corporation

Rite Aid Corporation is a retail drugstore chain. The Company’s segments include Retail Pharmacy and Pharmacy Services. The Company operates under The Rite Aid name. It operates approximately 4,560 stores in over 30 states across the country and in the District of Columbia. The Company’s Retail Pharmacy segment consists of Rite Aid stores, RediClinic and Health Dialog. It sells brand and generic prescription drugs, as well as an assortment of front-end products, including health and beauty aids, personal care products, seasonal merchandise, and a private brand product line. Its front-end products include over-the-counter medications, health and beauty aids, personal care items, cosmetics, household items, food and beverages, greeting cards, seasonal merchandise and numerous other everyday and convenience products. The Company’s Pharmacy Services segment consists of EnvisionRx, which provides a range of pharmacy benefit services.

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