Contrasting Winmark (NASDAQ:WINA) & Petco Health and Wellness (NASDAQ:WOOF)

Winmark (NASDAQ:WINA) and Petco Health and Wellness (NASDAQ:WOOF) are both small-cap retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, institutional ownership, profitability, valuation, analyst recommendations, risk and earnings.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Winmark and Petco Health and Wellness, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Winmark	0	0	0	0	0.00
Petco Health and Wellness	0	5	3	0	2.38

Petco Health and Wellness has a consensus price target of $3.75, indicating a potential upside of 23.27%. Given Petco Health and Wellness’ stronger consensus rating and higher probable upside, analysts plainly believe Petco Health and Wellness is more favorable than Winmark.

Profitability

This table compares Winmark and Petco Health and Wellness’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Winmark	49.45%	-95.03%	102.38%
Petco Health and Wellness	-1.10%	-4.29%	-0.92%

Volatility and Risk

Winmark has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500. Comparatively, Petco Health and Wellness has a beta of 1.71, meaning that its stock price is 71% more volatile than the S&P 500.

Institutional and Insider Ownership

73.3% of Winmark shares are owned by institutional investors. 10.1% of Winmark shares are owned by insiders. Comparatively, 4.4% of Petco Health and Wellness shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Winmark and Petco Health and Wellness”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Winmark	$81.29 million	16.27	$39.95 million	$11.19	33.49
Petco Health and Wellness	$6.12 billion	0.16	-$101.82 million	($0.24)	-12.67

Winmark has higher earnings, but lower revenue than Petco Health and Wellness. Petco Health and Wellness is trading at a lower price-to-earnings ratio than Winmark, indicating that it is currently the more affordable of the two stocks.

Summary

Winmark beats Petco Health and Wellness on 8 of the 14 factors compared between the two stocks.

About Winmark

Winmark Corporation, a resale company operates as a franchisor for small business in the United States and Canada. The company franchises retail stores concepts that buy, sell and trade merchandise. It also operates middle-market equipment leasing business. In addition, the company buys and sells used clothing and accessories geared toward the teenage and young adult market under Plato’s Closet brand; and operates stores which buys and sells used and new children’s clothing, toys, furniture, equipment, and accessories primarily to parents of children ages infant to 12 years under the Once Upon A Child brand. Further, it buys, sells, trades in, and used and new sporting goods, equipment, and accessories for various athletic activities including team sports, such as baseball/softball, hockey, football, lacrosse, and soccer, as well as fitness, ski/snowboard, golf, and others under the Play It Again Sports brand; and buys and sells used women’s apparel, shoes, and accessories under the Style Encore brand. Additionally, the company buys, sells, trades in, and used and new musical instruments, speakers, amplifiers, music-related electronics, and related accessories under the Music Go Round brand. Winmark Corporation was incorporated in 1988 and is headquartered in Minneapolis, Minnesota.

About Petco Health and Wellness

Petco Health and Wellness Company, Inc., operates as a health and wellness company, focuses on enhancing the lives of pets, pet parents, and its Petco partners in the United States, Mexico, and Puerto Rico. The company provides veterinary care, grooming, training, tele-health, and Vital Care and pet health insurance services, as well as veterinary services through Vetco mobile clinics. It also offers pet consumables, supplies, and services through its petco.com, petcoach.co, petinsurancequotes.com, and pupbox.com websites. The company offers its products under the WholeHearted, Reddy, and Well & Good brands. Petco Health and Wellness Company, Inc. was founded in 1965 and is headquartered in San Diego, California.