TravelCenters of America (NASDAQ: TA) and CST Brands (NYSE:CST) are both retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, earnings, institutional ownership, profitability and dividends.

Volatility and Risk

TravelCenters of America has a beta of 2.43, meaning that its share price is 143% more volatile than the S&P 500. Comparatively, CST Brands has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500.

Profitability

This table compares TravelCenters of America and CST Brands’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TravelCenters of America 0.40% -1.79% -0.59%
CST Brands -0.11% 0.97% -0.28%

Valuation & Earnings

This table compares TravelCenters of America and CST Brands’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
TravelCenters of America $5.51 billion 0.03 -$1.92 million $0.59 8.14
CST Brands N/A N/A N/A $4.04 12.01

CST Brands has higher revenue, but lower earnings than TravelCenters of America. TravelCenters of America is trading at a lower price-to-earnings ratio than CST Brands, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

38.7% of TravelCenters of America shares are held by institutional investors. Comparatively, 85.7% of CST Brands shares are held by institutional investors. 8.5% of TravelCenters of America shares are held by insiders. Comparatively, 2.1% of CST Brands shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

CST Brands pays an annual dividend of $0.06 per share and has a dividend yield of 0.1%. TravelCenters of America does not pay a dividend. CST Brands pays out 1.5% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of current recommendations for TravelCenters of America and CST Brands, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TravelCenters of America 1 0 2 0 2.33
CST Brands 0 1 0 0 2.00

TravelCenters of America presently has a consensus target price of $8.17, indicating a potential upside of 70.14%. CST Brands has a consensus target price of $49.00, indicating a potential upside of 0.97%. Given TravelCenters of America’s stronger consensus rating and higher probable upside, research analysts clearly believe TravelCenters of America is more favorable than CST Brands.

Summary

TravelCenters of America beats CST Brands on 8 of the 13 factors compared between the two stocks.

TravelCenters of America Company Profile

TravelCenters of America LLC (TravelCenters) operates and franchises travel centers and convenience store and restaurant locations. The Company’s segments include travel centers, convenience stores, and corporate and other. The Company offers a range of products and services, including diesel fuel and gasoline, as well as nonfuel products and services, such as truck repair and maintenance services, full service restaurants, quick service restaurants (QSRs), travel/convenience stores and various customer amenities. Its customers include trucking fleets and their drivers, independent truck drivers, highway and local motorists, and casual diners. As of December 31, 2016, the Company’s business included 255 travel centers in 43 states in the United States primarily along the United States interstate highway system, and the province of Ontario, Canada. As of December 31, 2016, the Company’s business included 233 convenience stores in 11 states in the United States.

CST Brands Company Profile

CST Brands LLC, formerly CST Brands, Inc., is a holding company. The Company is an independent retail of motor fuel and convenience merchandise in the United States and eastern Canada. Its segments include U.S. Retail, Canadian Retail and CrossAmerica. As of December 31, 2016, its U.S. Retail segment had 1,167 Company-operated retail sites located in Arkansas, Arizona, Colorado, Florida, Georgia, Louisiana, New Mexico, New York, Oklahoma and Texas. As of December 31, 2016, its Canadian Retail segment had 884 retail sites located in New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island and Quebec. As of December 31, 2016, its CrossAmerica segment had 1,187 distribution sites located in 29 states, which consisted of 403 independent dealer sites, 153 sites operated by Dunne Manning Stores LLC, 420 sites operated by lessee dealers, 95 commission sites, 73 CrossAmerica Partners LP Company-operated retail sites and 43 CST Company-operated retail sites.

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