AutoZone (NYSE: AZO) and Monro Muffler Brake (NASDAQ:MNRO) are both retail/wholesale companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitabiliy, dividends, earnings and risk.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for AutoZone and Monro Muffler Brake, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AutoZone 1 12 10 0 2.39
Monro Muffler Brake 0 4 4 0 2.50

AutoZone currently has a consensus target price of $763.05, indicating a potential upside of 49.19%. Monro Muffler Brake has a consensus target price of $63.33, indicating a potential upside of 30.99%. Given AutoZone’s higher probable upside, equities analysts clearly believe AutoZone is more favorable than Monro Muffler Brake.

Profitability

This table compares AutoZone and Monro Muffler Brake’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AutoZone 11.82% -70.52% 14.44%
Monro Muffler Brake 5.84% 10.90% 5.37%

Volatility & Risk

AutoZone has a beta of 0.62, indicating that its stock price is 38% less volatile than the S&P 500. Comparatively, Monro Muffler Brake has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500.

Insider and Institutional Ownership

96.8% of AutoZone shares are held by institutional investors. 2.6% of AutoZone shares are held by company insiders. Comparatively, 7.7% of Monro Muffler Brake shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares AutoZone and Monro Muffler Brake’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
AutoZone $10.77 billion 1.33 $2.39 billion $43.18 11.84
Monro Muffler Brake $1.02 billion 1.55 $162.01 million $1.88 25.72

AutoZone has higher revenue and earnings than Monro Muffler Brake. AutoZone is trading at a lower price-to-earnings ratio than Monro Muffler Brake, indicating that it is currently the more affordable of the two stocks.

Dividends

Monro Muffler Brake pays an annual dividend of $0.72 per share and has a dividend yield of 1.5%. AutoZone does not pay a dividend. Monro Muffler Brake pays out 38.3% of its earnings in the form of a dividend. Monro Muffler Brake has increased its dividend for 8 consecutive years.

Summary

AutoZone beats Monro Muffler Brake on 9 of the 17 factors compared between the two stocks.

About AutoZone

Autozone, Inc. is a retailer and distributor of automotive replacement parts and accessories in the United States. The Company operates through the Auto Parts Locations segment. The Auto Parts Locations segment is a retailer and distributor of automotive parts and accessories. As of August 27, 2016, the Company operated through 5,814 locations in the United States, Puerto Rico, Mexico and Brazil. The Company’s stores carry product lines for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories and non-automotive products. The Company’s other operating segments include ALLDATA, which produces, sells and maintains diagnostic and repair information software used in the automotive repair industry; E-commerce, which includes direct sales to customers through www.autozone.com, and AutoAnything, which includes direct sales to customers through www.autoanything.com.

About Monro Muffler Brake

Monro Muffler Brake, Inc. is engaged in the provision of automotive undercar repair and tire services in the United States. The Company provides a range of services on passenger cars, light trucks and vans for brakes; mufflers and exhaust systems, and steering, drive train, suspension and wheel alignment. It also offers tires and routine maintenance services, which include state inspections. It offers repair and replacement of parts. Its store provides a range of undercar repair services for brakes, steering, mufflers and exhaust systems, suspension and wheel alignment, as well as tire replacement and service. It also offers scheduled maintenance services in its stores where services are packaged and offered to consumers based upon the year, make, model and mileage of each specific vehicle. Its maintenance services include oil change services, heating and cooling system flush and fill service, belt installation, fuel system service and a transmission flush and fill service.

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