Grocery Outlet (NASDAQ:GO) versus Newell Brands (NASDAQ:NWL) Head-To-Head Contrast

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

Profitability

This table compares Newell Brands and Grocery Outlet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Newell Brands	-3.96%	9.17%	2.14%
Grocery Outlet	-0.10%	5.86%	2.13%

Institutional & Insider Ownership

92.5% of Newell Brands shares are held by institutional investors. Comparatively, 99.9% of Grocery Outlet shares are held by institutional investors. 0.7% of Newell Brands shares are held by company insiders. Comparatively, 4.5% of Grocery Outlet shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

Newell Brands has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500. Comparatively, Grocery Outlet has a beta of 0.49, suggesting that its share price is 51% less volatile than the S&P 500.

Valuation and Earnings

This table compares Newell Brands and Grocery Outlet”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Newell Brands	$7.20 billion	0.27	-$285.00 million	($0.68)	-6.91
Grocery Outlet	$4.37 billion	0.23	$39.47 million	($0.05)	-205.60

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

Analyst Recommendations

This is a summary of current ratings and target prices for Newell Brands and Grocery Outlet, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Newell Brands	1	5	4	0	2.30
Grocery Outlet	2	7	4	0	2.15

Newell Brands currently has a consensus target price of $6.11, suggesting a potential upside of 30.02%. Grocery Outlet has a consensus target price of $14.50, suggesting a potential upside of 41.05%. Given Grocery Outlet’s higher possible upside, analysts plainly believe Grocery Outlet is more favorable than Newell Brands.

Summary

Newell Brands beats Grocery Outlet on 7 of the 13 factors compared between the two stocks.

About Newell Brands

Newell Brands Inc. engages in the design, manufacture, sourcing, and distribution of consumer and commercial products worldwide. The company operates in three segments: Home and Commercial Solutions, Learning and Development, and Outdoor and Recreation. The Commercial Solutions segment provides commercial cleaning and maintenance solution products under the Rubbermaid, Rubbermaid Commercial Products, Mapa, and Spontex brands; closet and garage organization products; hygiene systems and material handling solutions; household products, such as kitchen appliances under the Crockpot, Mr. Coffee, Oster, and Sunbeam brands; small appliances under the Breville brand name in Europe; food and home storage products under the FoodSaver, Rubbermaid, Ball, and Sistema brands; fresh preserving products; vacuum sealing products; and gourmet cookware, bakeware, and cutlery under the Calphalon brand; and home fragrance products under the WoodWick and Yankee Candle brands. The Learning and Development segment offers writing instruments, including markers and highlighters, pens, and pencils; art products; activity-based products; labeling solutions; and baby gear and infant care products under the Dymo, Elmer's, EXPO, Graco, NUK, Paper Mate, Parker, and Sharpie brands. The Outdoor and Recreation segment provides outdoor and outdoor-related products, inlcuding technical apparel and on-the-go beverageware under the Campingaz, Coleman, Contigo, and Marmot brands. It serves warehouse clubs, department and drug/grocery stores, mass merchants, home centers, commercial products distributors, specialty retailers, office superstores and supply stores, contract stationers, e-commerce retailers, and sporting goods, as well as direct to consumers online, select contract customers, and other professional customers. Newell Brands Inc. was founded in 1903 and is based in Atlanta, Georgia.

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.