Financial Review: BJ’s Wholesale Club (NYSE:BJ) & Warby Parker (NYSE:WRBY)

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

Analyst Recommendations

This is a summary of current ratings and target prices for BJ’s Wholesale Club and Warby Parker, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BJ’s Wholesale Club	1	8	9	0	2.44
Warby Parker	0	5	9	0	2.64

BJ’s Wholesale Club currently has a consensus target price of $105.27, suggesting a potential upside of 14.75%. Warby Parker has a consensus target price of $29.50, suggesting a potential upside of 25.65%. Given Warby Parker’s stronger consensus rating and higher probable upside, analysts plainly believe Warby Parker is more favorable than BJ’s Wholesale Club.

Volatility and Risk

BJ’s Wholesale Club has a beta of 0.23, indicating that its stock price is 77% less volatile than the S&P 500. Comparatively, Warby Parker has a beta of 1.96, indicating that its stock price is 96% more volatile than the S&P 500.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BJ’s Wholesale Club	$21.46 billion	0.55	$578.38 million	$4.35	21.09
Warby Parker	$871.91 million	2.88	$1.64 million	$0.02	1,173.90

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
BJ’s Wholesale Club	2.62%	26.67%	7.59%
Warby Parker	0.15%	2.30%	1.18%

Insider and Institutional Ownership

98.6% of BJ’s Wholesale Club shares are owned by institutional investors. Comparatively, 93.2% of Warby Parker shares are owned by institutional investors. 1.1% of BJ’s Wholesale Club shares are owned by company insiders. Comparatively, 16.8% of Warby Parker shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

BJ’s Wholesale Club beats Warby Parker on 7 of the 13 factors compared between the two stocks.

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.

About Warby Parker

Warby Parker Inc. provides eyewear products in the United States and Canada. The company offers eyeglasses, sunglasses, light-responsive lenses, blue-light-filtering lenses, non-prescription lenses, and contact lenses. It also provides accessories, such as cases, lenses kit with anti-fog spray, pouches, and anti-fog lens spray through its retail stores, website, and mobile apps. In addition, the company offers eye exams and vision tests. Warby Parker Inc. was incorporated in 2009 and is headquartered in New York, New York.