Analyzing ARKO (NASDAQ:ARKO) and Colgate-Palmolive (NYSE:CL)

Colgate-Palmolive (NYSE:CL) and ARKO (NASDAQ:ARKO) are both consumer staples companies, but which is the better business? We will compare the two companies based on the strength of their valuation, risk, earnings, dividends, institutional ownership, profitability and analyst recommendations.

Earnings and Valuation

This table compares Colgate-Palmolive and ARKO”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Colgate-Palmolive	$20.10 billion	3.21	$2.89 billion	$3.57	22.39
ARKO	$8.73 billion	0.06	$20.84 million	$0.11	42.09

Colgate-Palmolive has higher revenue and earnings than ARKO. Colgate-Palmolive is trading at a lower price-to-earnings ratio than ARKO, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Colgate-Palmolive and ARKO’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Colgate-Palmolive	14.47%	333.39%	17.57%
ARKO	0.24%	6.95%	0.52%

Volatility and Risk

Colgate-Palmolive has a beta of 0.3, meaning that its share price is 70% less volatile than the S&P 500. Comparatively, ARKO has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Colgate-Palmolive and ARKO, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Colgate-Palmolive	1	5	10	0	2.56
ARKO	1	3	1	1	2.33

Colgate-Palmolive presently has a consensus price target of $88.81, indicating a potential upside of 11.11%. ARKO has a consensus price target of $7.13, indicating a potential upside of 53.89%. Given ARKO’s higher probable upside, analysts clearly believe ARKO is more favorable than Colgate-Palmolive.

Dividends

Colgate-Palmolive pays an annual dividend of $2.08 per share and has a dividend yield of 2.6%. ARKO pays an annual dividend of $0.12 per share and has a dividend yield of 2.6%. Colgate-Palmolive pays out 58.3% of its earnings in the form of a dividend. ARKO pays out 109.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Colgate-Palmolive has raised its dividend for 63 consecutive years. Colgate-Palmolive is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

80.4% of Colgate-Palmolive shares are owned by institutional investors. Comparatively, 78.3% of ARKO shares are owned by institutional investors. 0.4% of Colgate-Palmolive shares are owned by company insiders. Comparatively, 22.5% of ARKO shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Colgate-Palmolive beats ARKO on 13 of the 18 factors compared between the two stocks.

About Colgate-Palmolive

Colgate-Palmolive Company, together with its subsidiaries, manufactures and sells consumer products in the United States and internationally. It operates through two segments: Oral, Personal and Home Care; and Pet Nutrition. The Oral, Personal and Home Care segment offers toothpaste, toothbrushes, mouthwash, bar and liquid hand soaps, shower gels, shampoos, conditioners, deodorants and antiperspirants, skin health products, dishwashing detergents, fabric conditioners, household cleaners, and other related items. This segment markets and sells its products under various brands, which include Colgate, Darlie, elmex, hello, meridol, Sorriso, Tom's of Maine, Irish Spring, Palmolive, Protex, Sanex, Softsoap, Lady Speed Stick, Speed Stick, EltaMD, Filorga, PCA SKIN, Ajax, Axion, Fabuloso, Murphy, Suavitel, and Soupline to a range of traditional and eCommerce retailers, wholesalers, and distributors. It includes pharmaceutical products for dentists and other oral health professionals. Its Pet Nutrition segment offers pet nutrition products for everyday nutritional needs under the Hill's Science Diet brand; and a range of therapeutic pet products to help nutritionally support dogs and cats in different stages of health under the Hill's Prescription Diet brand. This segment markets and sells its products through pet supply retailers, veterinarians, and eCommerce retailers. Colgate-Palmolive Company was founded in 1806 and is headquartered in New York, New York.

About ARKO

Arko Corp. operates convenience stores in the United States. It operates through Retail, Wholesale, Fleet Fueling, and GPMP segments. The Retail segment engages in the sale of fuel and merchandise to retail consumers. Its Wholesale segment supplies fuel to third-party dealers and consignment agents. The Fleet Fueling segment supplies fuel to proprietary and third-party cardlock, and issuance of proprietary fuel cards. Its GPMP segment supplies fuel to retail and wholesale segments. The company is based in Richmond, Virginia.