Contrasting BJ’s Wholesale Club (NYSE:BJ) and Leslie’s (NASDAQ:LESL)

Leslie’s (NASDAQ:LESL) and BJ’s Wholesale Club (NYSE:BJ) are both consumer staples companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, institutional ownership, dividends and risk.

Risk and Volatility

Leslie’s has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500. Comparatively, BJ’s Wholesale Club has a beta of 0.33, indicating that its stock price is 67% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Leslie’s and BJ’s Wholesale Club, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Leslie’s	2	10	0	0	1.83
BJ’s Wholesale Club	0	10	10	0	2.50

Leslie’s currently has a consensus price target of $27.25, indicating a potential upside of 781.88%. BJ’s Wholesale Club has a consensus price target of $111.06, indicating a potential upside of 21.15%. Given Leslie’s’ higher probable upside, research analysts clearly believe Leslie’s is more favorable than BJ’s Wholesale Club.

Valuation and Earnings

This table compares Leslie’s and BJ’s Wholesale Club”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Leslie’s	$1.25 billion	0.02	-$23.38 million	($9.00)	-0.34
BJ’s Wholesale Club	$20.50 billion	0.59	$534.42 million	$4.36	21.03

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

Insider & Institutional Ownership

98.6% of BJ’s Wholesale Club shares are held by institutional investors. 0.7% of Leslie’s shares are held by company insiders. Comparatively, 1.4% of BJ’s Wholesale Club shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Leslie’s and BJ’s Wholesale Club’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Leslie’s	-6.72%	N/A	-4.96%
BJ’s Wholesale Club	2.77%	30.40%	8.14%

Summary

BJ’s Wholesale Club beats Leslie’s on 12 of the 14 factors compared between the two stocks.

About Leslie’s

Leslie’s, Inc. operates as a direct-to-consumer pool and spa care brand in the United States. The company markets and sells pool and spa supplies and related products and services. It also offers various pool and spa maintenance items, such as chemicals, equipment and parts, cleaning and maintenance equipment, safety, recreational, and fitness related products. In addition, the company provides installation and repair services for pool and spa equipment. It also sells its products through e-commerce websites and third-party marketplaces. The company offers complimentary, commercial-grade in-store, water testing, and analysis services. It serves the residential, professional, and commercial consumers. Leslie’s, Inc. was founded in 1963 and is based in Phoenix, Arizona.

About BJ’s Wholesale Club

BJ’s Wholesale Club Holdings, Inc. engages in the operation of membership warehouse clubs. Its product categories include grocery, household and pet, television and electronics, furniture, computer and tablets, patio and outdoor living, lawn and garden, baby and kids, toys, home, health and beauty, appliances, and jewelry. The company was founded in 1984 and is headquartered in Marlborough, MA.