TJX Companies (NYSE:TJX) versus Group 1 Automotive (NYSE:GPI) Head-To-Head Contrast

Group 1 Automotive (NYSE:GPI) and TJX Companies (NYSE:TJX) are both consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, profitability, valuation and risk.

Analyst Recommendations

This is a summary of current ratings and price targets for Group 1 Automotive and TJX Companies, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Group 1 Automotive	2	3	5	0	2.30
TJX Companies	0	4	16	2	2.91

Group 1 Automotive currently has a consensus price target of $373.38, indicating a potential upside of 51.27%. TJX Companies has a consensus price target of $171.63, indicating a potential upside of 34.82%. Given Group 1 Automotive’s higher possible upside, analysts clearly believe Group 1 Automotive is more favorable than TJX Companies.

Risk & Volatility

Group 1 Automotive has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500. Comparatively, TJX Companies has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500.

Profitability

This table compares Group 1 Automotive and TJX Companies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Group 1 Automotive	1.31%	15.66%	4.43%
TJX Companies	9.73%	56.56%	15.92%

Earnings and Valuation

This table compares Group 1 Automotive and TJX Companies”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Group 1 Automotive	$22.57 billion	0.13	$325.20 million	$24.01	10.28
TJX Companies	$60.37 billion	2.32	$5.49 billion	$5.41	23.53

TJX Companies has higher revenue and earnings than Group 1 Automotive. Group 1 Automotive is trading at a lower price-to-earnings ratio than TJX Companies, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

99.9% of Group 1 Automotive shares are held by institutional investors. Comparatively, 91.1% of TJX Companies shares are held by institutional investors. 2.4% of Group 1 Automotive shares are held by insiders. Comparatively, 0.2% of TJX Companies shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Group 1 Automotive pays an annual dividend of $2.20 per share and has a dividend yield of 0.9%. TJX Companies pays an annual dividend of $1.92 per share and has a dividend yield of 1.5%. Group 1 Automotive pays out 9.2% of its earnings in the form of a dividend. TJX Companies pays out 35.5% 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. Group 1 Automotive has raised its dividend for 2 consecutive years and TJX Companies has raised its dividend for 5 consecutive years. TJX Companies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

TJX Companies beats Group 1 Automotive on 12 of the 18 factors compared between the two stocks.

About Group 1 Automotive

Group 1 Automotive, Inc., through its subsidiaries, operates in the automotive retail industry in the United States and the United Kingdom. The company sells new and used cars, light trucks, and vehicle parts, as well as service and insurance contracts; arranges related vehicle financing; and offers automotive maintenance and repair services. Group 1 Automotive, Inc. was incorporated in 1995 and is headquartered in Houston, Texas.

About TJX Companies

The TJX Companies, Inc., together with its subsidiaries, operates as an off-price apparel and home fashions retailer in the United States, Canada, Europe, and Australia. It operates through four segments: Marmaxx, HomeGoods, TJX Canada, and TJX International. The company sells family apparel, including footwear and accessories; home fashions, such as home basics, furniture, rugs, lighting products, giftware, soft home products, decorative accessories, tabletop, and cookware, as well as expanded pet, and gourmet food departments; jewelry and accessories; and other merchandise. It offers its products through stores and e-commerce sites. The TJX Companies, Inc. was incorporated in 1962 and is headquartered in Framingham, Massachusetts.