Analyzing Burlington Stores (NYSE:BURL) & AutoNation (NYSE:AN)

Burlington Stores (NYSE:BURL) and AutoNation (NYSE:AN) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, profitability, dividends, institutional ownership, risk and earnings.

Profitability

This table compares Burlington Stores and AutoNation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Burlington Stores	5.85%	41.72%	7.61%
AutoNation	2.82%	31.24%	4.97%

Analyst Ratings

This is a summary of current recommendations and price targets for Burlington Stores and AutoNation, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Burlington Stores	0	6	14	0	2.70
AutoNation	0	3	9	0	2.75

Burlington Stores presently has a consensus target price of $370.75, suggesting a potential upside of 37.01%. AutoNation has a consensus target price of $246.50, suggesting a potential upside of 51.67%. Given AutoNation’s stronger consensus rating and higher probable upside, analysts clearly believe AutoNation is more favorable than Burlington Stores.

Insider and Institutional Ownership

94.6% of AutoNation shares are owned by institutional investors. 1.3% of Burlington Stores shares are owned by insiders. Comparatively, 1.4% of AutoNation shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

Burlington Stores has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500. Comparatively, AutoNation has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500.

Earnings and Valuation

This table compares Burlington Stores and AutoNation”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Burlington Stores	$11.57 billion	1.47	$610.15 million	$11.14	24.29
AutoNation	$27.63 billion	0.19	$649.10 million	$21.59	7.53

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

About Burlington Stores

Burlington Stores, Inc. operates as a retailer of branded merchandise in the United States. The company provides fashion-focused merchandise, including women's ready-to-wear apparel, menswear, youth apparel, footwear, accessories, toys, gifts, and coats, as well as baby, home, and beauty products. It operates stores under the Burlington Stores, and Cohoes Fashions brand names in Washington D.C. and Puerto Rico. Burlington Stores, Inc. was founded in 1972 and is headquartered in Burlington, New Jersey.

About AutoNation

AutoNation, Inc., through its subsidiaries, operates as an automotive retailer in the United States. The company operates through three segments: Domestic, Import, and Premium Luxury. It offers a range of automotive products and services, including new and used vehicles; and parts and services, such as automotive repair and maintenance, and wholesale parts and collision services. The company also provides automotive finance and insurance products comprising vehicle services and other protection products; and indirect financing for vehicles, as well as arranges finance for vehicle purchases through third-party finance sources. It owns and operates new vehicle franchises from stores located primarily in metropolitan markets in the Sunbelt region, as well as AutoNation-branded collision centers, AutoNation USA used vehicle stores, AutoNation-branded automotive auction operations, and parts distribution centers. The company was formerly known as Republic Industries, Inc. and changed its name to AutoNation, Inc. in 1999. AutoNation, Inc. was incorporated in 1980 and is headquartered in Fort Lauderdale, Florida.