Contrasting ARKO (NASDAQ:ARKO) and Tilly’s (NYSE:TLYS)

ARKO (NASDAQ:ARKO) and Tilly’s (NYSE:TLYS) are both small-cap consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, profitability, institutional ownership, valuation, earnings and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent ratings for ARKO and Tilly’s, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ARKO	1	1	1	0	2.00
Tilly’s	0	3	0	0	2.00

ARKO currently has a consensus target price of $14.50, indicating a potential upside of 265.24%. Tilly’s has a consensus target price of $5.50, indicating a potential upside of 31.55%. Given ARKO’s higher possible upside, analysts clearly believe ARKO is more favorable than Tilly’s.

Risk & Volatility

ARKO has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500. Comparatively, Tilly’s has a beta of 0.09, meaning that its share price is 91% less volatile than the S&P 500.

Valuation & Earnings

This table compares ARKO and Tilly’s”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ARKO	$7.64 billion	0.06	$22.74 million	$0.07	56.71
Tilly’s	$553.59 million	0.23	-$17.45 million	$0.06	69.68

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

Profitability

This table compares ARKO and Tilly’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ARKO	0.19%	4.02%	0.41%
Tilly’s	0.34%	2.37%	0.61%

Institutional and Insider Ownership

78.3% of ARKO shares are held by institutional investors. Comparatively, 76.4% of Tilly’s shares are held by institutional investors. 21.9% of ARKO shares are held by insiders. Comparatively, 26.4% of Tilly’s shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

ARKO beats Tilly’s on 9 of the 13 factors compared between the two stocks.

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.

About Tilly’s

Tilly’s, Inc. engages in the retail of casual apparel, footwear, and accessories. Its stores are located in retail centers, including malls, lifestyle centers, power centers, community centers, outlet centers, and street-front locations. The company was founded by Hezy Shaked and Tilly Levine in 1982 and is headquartered in Irvine, CA.