Critical Analysis: AutoZone (NYSE:AZO) versus WH Smith (OTCMKTS:WHTPF)

WH Smith (OTCMKTS:WHTPF) and AutoZone (NYSE:AZO) are both consumer cyclical companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, dividends, valuation and analyst recommendations.

Insider & Institutional Ownership

92.7% of AutoZone shares are owned by institutional investors. 2.5% of AutoZone shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares WH Smith and AutoZone’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WH Smith	N/A	N/A	N/A
AutoZone	14.40%	-52.99%	15.46%

Analyst Ratings

This is a summary of current ratings and recommmendations for WH Smith and AutoZone, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WH Smith	0	0	0	0	N/A
AutoZone	1	2	14	4	3.00

AutoZone has a consensus price target of $3,202.71, indicating a potential upside of 0.79%. Given AutoZone’s higher possible upside, analysts clearly believe AutoZone is more favorable than WH Smith.

Valuation & Earnings

This table compares WH Smith and AutoZone”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WH Smith	N/A	N/A	N/A	$0.76	19.47
AutoZone	$18.49 billion	2.94	$2.66 billion	$144.59	21.98

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

Summary

AutoZone beats WH Smith on 10 of the 11 factors compared between the two stocks.

About WH Smith

WH Smith PLC operates as a retailer in the United Kingdom and internationally. It operates in two segments, Travel and High Street. The Travel segment offers news, books, and convenience for travelling customers. It operates stores in airports, hospitals, railway stations, and motorway service areas. The High Street segment sells stationery products, including greeting cards, general stationery, art and craft, and gifting products; news and impulse products, such as newspapers, magazines, confectionery, and drinks; and books. The company sells its products through digital channels, such as whsmith.co.uk, funkypigeon.com, cultpens.com and dottyaboutpaper.co.uk. The company was founded in 1792 and is based in Swindon, the United Kingdom.

About AutoZone

AutoZone, Inc. retails and distributes automotive replacement parts and accessories in the United States, Mexico, and Brazil. The company provides various products for cars, sport utility vehicles, vans, and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. It also offers A/C compressors, batteries and accessories, bearings, belts and hoses, calipers, chassis, clutches, CV axles, engines, fuel pumps, fuses, ignition and lighting products, mufflers, radiators, starters and alternators, thermostats, and water pumps, as well as tire repairs. In addition, the company provides maintenance products, such as antifreeze and windshield washer fluids; brake drums, rotors, shoes, and pads; brake and power steering fluids, and oil and fuel additives; oil and transmission fluids; oil, cabin, air, fuel, and transmission filters; oxygen sensors; paints and accessories; refrigerants and accessories; shock absorbers and struts; spark plugs and wires; and windshield wipers. Further, it offers air fresheners, cell phone accessories, drinks and snacks, floor mats and seat covers, interior and exterior accessories, mirrors, performance products, protectants and cleaners, sealants and adhesives, steering wheel covers, tools, vehicle entertainment systems, and wash and wax products, as well as towing services. Additionally, the company provides a sales program that offers commercial credit and delivery of parts and other products; sells automotive diagnostic and repair software under the ALLDATA brand through alldata.com and alldatadiy.com; and automotive hard parts, maintenance items, accessories, and non-automotive products through autozone.com. AutoZone, Inc. was founded in 1979 and is headquartered in Memphis, Tennessee.