Critical Contrast: Valvoline (NYSE:VVV) vs. Victoria’s Secret & Co. (NYSE:VSXY)

Valvoline (NYSE:VVV) and Victoria’s Secret & Co. (NYSE:VSXY) are both mid-cap consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, risk, earnings and institutional ownership.

Volatility & Risk

Valvoline has a beta of 1.03, indicating that its share price is 3% more volatile than the S&P 500. Comparatively, Victoria’s Secret & Co. has a beta of 2.01, indicating that its share price is 101% more volatile than the S&P 500.

Institutional & Insider Ownership

96.1% of Valvoline shares are owned by institutional investors. Comparatively, 90.3% of Victoria’s Secret & Co. shares are owned by institutional investors. 0.7% of Valvoline shares are owned by company insiders. Comparatively, 0.5% of Victoria’s Secret & Co. shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Valvoline and Victoria’s Secret & Co.”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Valvoline	$1.96 billion	2.10	$210.70 million	$0.80	40.41
Victoria’s Secret & Co.	$6.55 billion	1.21	$161.00 million	$3.45	28.72

Valvoline has higher earnings, but lower revenue than Victoria’s Secret & Co.. Victoria’s Secret & Co. is trading at a lower price-to-earnings ratio than Valvoline, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings for Valvoline and Victoria’s Secret & Co., as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Valvoline	0	5	13	0	2.72
Victoria’s Secret & Co.	0	7	8	0	2.53

Valvoline presently has a consensus price target of $41.17, indicating a potential upside of 27.33%. Victoria’s Secret & Co. has a consensus price target of $92.00, indicating a potential downside of 7.14%. Given Valvoline’s stronger consensus rating and higher probable upside, equities analysts plainly believe Valvoline is more favorable than Victoria’s Secret & Co..

Profitability

This table compares Valvoline and Victoria’s Secret & Co.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Valvoline	5.17%	65.12%	7.11%
Victoria’s Secret & Co.	5.46%	40.43%	7.04%

Summary

Valvoline beats Victoria’s Secret & Co. on 10 of the 14 factors compared between the two stocks.

About Valvoline

Valvoline Inc. engages in the operation and franchising of vehicle service centers and retail stores in the United States and Canada. The company, through its service centers, provides fluid exchange for motor oil, transmission and differential fluid, and coolant; parts replacement for batteries, filters, wiper blades, and belts; and safety services, such as tire inflation and rotation, bulbs, and safety checks. It offers its services for passenger cars, hybrid and battery electric vehicles, and light and medium duty vehicles. The company was founded in 1866 and is headquartered in Lexington, Kentucky.

About Victoria’s Secret & Co.

Victoria’s Secret & Co. operates as a lingerie, clothing and beauty retailer. It offers bras, panties, lingerie, pajamas, sleep, sport and swim apparel, and beauty products. The company was founded in 1963 and is headquartered in Reynoldsburg, OH.