Head-To-Head Comparison: Advance Auto Parts (NYSE:AAP) vs. Chewy (NYSE:CHWY)

Chewy (NYSE:CHWY) and Advance Auto Parts (NYSE:AAP) are both mid-cap consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, dividends, valuation, analyst recommendations, institutional ownership, risk and profitability.

Insider and Institutional Ownership

93.1% of Chewy shares are held by institutional investors. Comparatively, 88.7% of Advance Auto Parts shares are held by institutional investors. 0.3% of Chewy shares are held by insiders. Comparatively, 0.8% of Advance Auto Parts shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Chewy and Advance Auto Parts”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chewy	$13.07 billion	0.57	$222.80 million	$0.66	28.11
Advance Auto Parts	$8.60 billion	0.29	$44.00 million	$1.37	29.91

Chewy has higher revenue and earnings than Advance Auto Parts. Chewy is trading at a lower price-to-earnings ratio than Advance Auto Parts, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations for Chewy and Advance Auto Parts, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chewy	1	7	17	1	2.69
Advance Auto Parts	1	17	2	0	2.05

Chewy currently has a consensus price target of $30.64, suggesting a potential upside of 65.15%. Advance Auto Parts has a consensus price target of $50.19, suggesting a potential upside of 22.47%. Given Chewy’s stronger consensus rating and higher possible upside, research analysts clearly believe Chewy is more favorable than Advance Auto Parts.

Profitability

This table compares Chewy and Advance Auto Parts’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chewy	2.09%	60.88%	7.83%
Advance Auto Parts	0.97%	9.84%	1.83%

Risk and Volatility

Chewy has a beta of 1.42, indicating that its share price is 42% more volatile than the S&P 500. Comparatively, Advance Auto Parts has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500.

Summary

Chewy beats Advance Auto Parts on 12 of the 15 factors compared between the two stocks.

About Chewy

Chewy, Inc., together with its subsidiaries, engages in the pure play e-commerce business in the United States. It provides pet food and treats, pet supplies and pet medications, and other pet-health products, as well as pet services for dogs, cats, fish, birds, small pets, horses, and reptiles through its retail websites and mobile applications. The company was founded in 2010 and is based in Plantation, Florida.

About Advance Auto Parts

Advance Auto Parts, Inc. provides automotive replacement parts, accessories, batteries, and maintenance items for domestic and imported cars, vans, sport utility vehicles, and light and heavy duty trucks. The company offers battery accessories; belts and hoses; brakes and brake pads; chassis and climate control parts; clutches and drive shafts; engines and engine parts; exhaust systems and parts; hub assemblies; ignition components and wires; radiators and cooling parts; starters and alternators; and steering and alignment parts. It also offers air conditioning chemicals and accessories; air fresheners; antifreeze and washer fluids; electrical wires and fuses; electronics; floor mats, seat covers, and interior accessories; hand and specialty tools; lighting products; performance parts; sealants, adhesives, and compounds; tire repair accessories; vent shades, mirrors and exterior accessories; washes, waxes and cleaning supplies; and wiper blades. In addition, the company offers air filters; fuel and oil additives; fuel filters; grease and lubricants; motor oils; oil filters, part cleaners and treatments; and transmission fluids for engine maintenance. Further, it offers battery and wiper installation; engine light scanning and checking; electrical system testing, including batteries, starters, and alternators; oil and battery recycling; and loaner tool program services. Additionally, the company sells its products through its website. It serves professional installers and do-it-yourself customers. The company operates stores under the Advance Auto Parts and Carquest names, as well as branches under the Worldpac name. The company has stores in the United States, Puerto Rico, the U.S. Virgin Islands, and Canada; and independently owned Carquest branded stores in Mexico and various Caribbean Islands. Advance Auto Parts, Inc. was founded in 1929 and is based in Raleigh, North Carolina.