Head-To-Head Review: ARKO (NASDAQ:ARKO) & Energizer (NYSE:ENR)

Energizer (NYSE:ENR) and ARKO (NASDAQ:ARKO) are both small-cap consumer staples companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, analyst recommendations and risk.

Dividends

Energizer pays an annual dividend of $1.20 per share and has a dividend yield of 5.8%. ARKO pays an annual dividend of $0.12 per share and has a dividend yield of 1.6%. Energizer pays out 44.0% of its earnings in the form of a dividend. ARKO pays out 63.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Energizer is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Energizer and ARKO”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Energizer	$2.95 billion	0.48	$239.00 million	$2.73	7.56
ARKO	$7.64 billion	0.11	$22.74 million	$0.19	40.53

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Energizer	6.55%	144.22%	5.37%
ARKO	0.38%	9.10%	0.80%

Volatility & Risk

Energizer has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500. Comparatively, ARKO has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500.

Insider and Institutional Ownership

93.7% of Energizer shares are held by institutional investors. Comparatively, 78.3% of ARKO shares are held by institutional investors. 1.6% of Energizer shares are held by company insiders. Comparatively, 22.5% of ARKO 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.

Analyst Ratings

This is a summary of current ratings for Energizer and ARKO, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Energizer	0	7	1	0	2.12
ARKO	1	1	0	1	2.33

Energizer presently has a consensus price target of $23.14, indicating a potential upside of 12.09%. ARKO has a consensus price target of $8.00, indicating a potential upside of 3.90%. Given Energizer’s higher possible upside, equities analysts clearly believe Energizer is more favorable than ARKO.

Summary

Energizer beats ARKO on 11 of the 17 factors compared between the two stocks.

About Energizer

Energizer Holdings, Inc., together with its subsidiaries, manufactures, markets, and distributes household batteries, specialty batteries, and lighting products worldwide. It offers lithium, alkaline, carbon zinc, nickel metal hydride, zinc air, and silver oxide batteries under the Energizer, Eveready, and Rayovac brands; primary, rechargeable, specialty, and hearing aid batteries; and handheld, headlights, lanterns, and area lights, as well as flashlights under the Hard Case, Dolphin, and WeatherReady brands. The company licenses the Energizer, Rayovac, and Eveready brands to companies developing consumer solutions in solar, automotive batteries, portable power for critical devices, generators, power tools, household light bulbs, and other lighting products. In addition, it designs and markets automotive fragrance and appearance products, including protectants, wipes, tire and wheel care products, glass cleaners, leather care products, air fresheners, and washes to clean, shine, refresh, and protect interior and exterior automobile surfaces under the brand names of Armor All, Nu Finish, Refresh Your Car!, LEXOL, Eagle One, California Scents, Driven, Bahama & Co, Carnu, Grand Prix, Kit, and Tempo; STP branded fuel and oil additives, functional fluids, and other performance chemical products; and do-it-yourself automotive air conditioning recharge products under the A/C PRO brand name, as well as other refrigerant and recharge kits, sealants, and accessories. The company sells its products through direct sales force, distributors, and wholesalers; and various retail and business-to-business channels, including mass merchandisers, club, electronics, food, home improvement, dollar store, auto, drug, hardware, e-commerce, convenience, sporting goods, hobby/craft, office, industrial, medical, and catalog. Energizer Holdings, Inc. was incorporated in 2015 and is headquartered in Saint Louis, Missouri.

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.