Head-To-Head Comparison: Groupon (NASDAQ:GRPN) & Dollarama (OTCMKTS:DLMAF)

Groupon (NASDAQ:GRPN) and Dollarama (OTCMKTS:DLMAF) are both consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, institutional ownership, earnings, dividends, analyst recommendations, valuation and profitability.

Profitability

This table compares Groupon and Dollarama’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Groupon	-25.26%	N/A	-20.28%
Dollarama	17.32%	98.00%	17.42%

Analyst Ratings

This is a summary of current ratings and price targets for Groupon and Dollarama, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Groupon	2	1	1	0	1.75
Dollarama	0	4	4	5	3.08

Groupon presently has a consensus price target of $26.00, indicating a potential upside of 17.91%. Given Groupon’s higher probable upside, analysts plainly believe Groupon is more favorable than Dollarama.

Insider and Institutional Ownership

90.0% of Groupon shares are held by institutional investors. 36.6% of Groupon shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Groupon and Dollarama”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Groupon	$498.42 million	1.80	-$83.52 million	($3.11)	-7.09
Dollarama	$5.21 billion	6.58	$940.70 million	$3.60	35.41

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

Summary

Dollarama beats Groupon on 11 of the 14 factors compared between the two stocks.

About Groupon

Groupon, Inc., together with its subsidiaries, operates a marketplace that connects consumers to merchants. It operates in two segments, North America and International. The company sells goods or services on behalf of third-party merchants. It serves customers through its mobile applications and websites. The company was formerly known as ThePoint.com, Inc. and changed its name to Groupon, Inc. in October 2008. Groupon, Inc. was incorporated in 2008 and is headquartered in Chicago, Illinois.

About Dollarama

Dollarama Inc. operates a chain of dollar stores in Canada. Its stores offer general merchandise, consumables, and seasonal products. It also sells its products through online store. The company was formerly known as Dollarama Capital Corporation and changed its name to Dollarama Inc. in September 2009. Dollarama Inc. was founded in 1992 and is headquartered in Mount Royal, Canada.