Critical Survey: AutoCanada (OTCMKTS:AOCIF) and Driven Brands (NASDAQ:DRVN)

AutoCanada (OTCMKTS:AOCIF) and Driven Brands (NASDAQ:DRVN) are both consumer cyclical companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, risk, dividends, institutional ownership and profitability.

Earnings & Valuation

This table compares AutoCanada and Driven Brands”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AutoCanada	N/A	N/A	N/A	$2.17	5.47
Driven Brands	$2.32 billion	1.00	-$744.96 million	($4.66)	-3.03

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

Institutional and Insider Ownership

44.8% of AutoCanada shares are owned by institutional investors. Comparatively, 77.1% of Driven Brands shares are owned by institutional investors. 2.6% of Driven Brands shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares AutoCanada and Driven Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AutoCanada	N/A	N/A	N/A
Driven Brands	-33.56%	15.12%	2.34%

Analyst Ratings

This is a summary of recent ratings for AutoCanada and Driven Brands, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AutoCanada	0	0	0	0	N/A
Driven Brands	0	4	6	1	2.73

Driven Brands has a consensus price target of $16.95, suggesting a potential upside of 20.21%. Given Driven Brands’ higher possible upside, analysts plainly believe Driven Brands is more favorable than AutoCanada.

Summary

Driven Brands beats AutoCanada on 8 of the 11 factors compared between the two stocks.

About AutoCanada

AutoCanada Inc., through its subsidiaries, operates franchised automobile dealerships and related business. The company offers a range of automotive products and services, including new and used vehicles, vehicle leasing, vehicle parts, vehicle maintenance and collision repair services, and extended service contracts; and vehicle protection, after-market products, and auction services. It also arranges financing and insurance for vehicle purchases by its customers through third-party finance and insurance sources. The company sells its vehicles under the Chrysler, Dodge, Jeep, Ram, FIAT, Alfa Romeo, Chevrolet, GMC, Buick, Cadillac, Infiniti, Nissan, Hyundai, Subaru, Audi, Volkswagen, Mazda, Mercedes-Benz, BMW, MINI, Ford, Acura, Honda, Kia, and Porsche brands. It operates franchised dealerships in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nova Scotia, and New Brunswick in Canada, as well as in Illinois, the United States. The company also offers used vehicles online. AutoCanada Inc. was incorporated in 2009 and is based in Edmonton, Canada.

About Driven Brands

Driven Brands Holdings Inc., together with its subsidiaries, provides automotive services to retail and commercial customers in the United States, Canada, and internationally. It offers various services, such as paint, collision, glass, repair, car wash, oil change, and maintenance services. The company also distributes automotive parts, including radiators, air conditioning components, and exhaust products to automotive repair shops, auto parts stores, body shops, and other auto repair outlets; windshields and glass accessories through a network of distribution centers; and consumable products, such as oil filters and wiper blades, as well as training services to repair and maintenance, and paint and collision shops. It sells its products and services under the CARSTAR, IMO, MAACO, Meineke Car Care Centers, PH Vitres D’Autos, Take 5 Oil Change, Take 5 Car Wash, Auto Glass Now, Fix Auto USA, and 1-800-Radiator & A/C, Spire Supply, and Automotive Training Institute brands. The company was founded in 1972 and is headquartered in Charlotte, North Carolina.