Analyzing Clorox (NYSE:CLX) & BJ’s Wholesale Club (NYSE:BJ)

Clorox (NYSE:CLX) and BJ’s Wholesale Club (NYSE:BJ) are both large-cap consumer staples companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.

Insider & Institutional Ownership

78.5% of Clorox shares are owned by institutional investors. Comparatively, 98.6% of BJ’s Wholesale Club shares are owned by institutional investors. 0.6% of Clorox shares are owned by company insiders. Comparatively, 1.4% of BJ’s Wholesale Club shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Clorox and BJ’s Wholesale Club’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Clorox	11.40%	377.86%	17.35%
BJ’s Wholesale Club	2.77%	30.40%	8.14%

Risk and Volatility

Clorox has a beta of 0.49, suggesting that its share price is 51% less volatile than the S&P 500. Comparatively, BJ’s Wholesale Club has a beta of 0.43, suggesting that its share price is 57% less volatile than the S&P 500.

Earnings and Valuation

This table compares Clorox and BJ’s Wholesale Club”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Clorox	$7.10 billion	2.03	$810.00 million	$6.52	18.06
BJ’s Wholesale Club	$20.50 billion	0.62	$534.42 million	$4.36	22.06

Clorox has higher earnings, but lower revenue than BJ’s Wholesale Club. Clorox is trading at a lower price-to-earnings ratio than BJ’s Wholesale Club, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Clorox and BJ’s Wholesale Club, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Clorox	3	8	1	0	1.83
BJ’s Wholesale Club	0	9	10	0	2.53

Clorox currently has a consensus price target of $143.36, suggesting a potential upside of 21.72%. BJ’s Wholesale Club has a consensus price target of $113.18, suggesting a potential upside of 17.65%. Given Clorox’s higher probable upside, analysts clearly believe Clorox is more favorable than BJ’s Wholesale Club.

Summary

Clorox beats BJ’s Wholesale Club on 8 of the 14 factors compared between the two stocks.

About Clorox

The Clorox Company manufactures and markets consumer and professional products worldwide. It operates through four segments: Health and Wellness, Household, Lifestyle, and International. The Health and Wellness segment offers cleaning products, such as laundry additives and home care products primarily under the Clorox, Clorox2, Scentiva, Pine-Sol, Liquid-Plumr, Tilex, and Formula 409 brands; professional cleaning and disinfecting products under the CloroxPro and Clorox Healthcare brands; professional food service products under the Hidden Valley brand; and vitamins, minerals and supplement products under the RenewLife, Natural Vitality, NeoCell, and Rainbow Light brands in the United States. The Household segment provides cat litter products under the Fresh Step and Scoop Away brands; bags and wraps under the Glad brand; and grilling products under the Kingsford brand in the United States. The Lifestyle segment offers dressings, dips, seasonings, and sauces primarily under the Hidden Valley brand; natural personal care products under the Burt's Bees brand; and water-filtration products under the Brita brand in the United States. The International segment provides laundry additives; home care products; water-filtration systems; digestive health products; grilling products; cat litter products; food products; bags and wraps; natural personal care products; and professional cleaning and disinfecting products internationally primarily under the Clorox, Ayudin, Clorinda, Poett, Pine-Sol, Glad, Brita, RenewLife, Ever Clean and Burt's Bees brands. It sells its products primarily through mass retailers; grocery outlets; warehouse clubs; dollar stores; home hardware centers; drug, pet, and military stores; third-party and owned e-commerce channels; and distributors, as well as a direct sales force The Clorox Company was founded in 1913 and is headquartered in Oakland, California.

About BJ’s Wholesale Club

BJ’s Wholesale Club Holdings, Inc. engages in the operation of membership warehouse clubs. Its product categories include grocery, household and pet, television and electronics, furniture, computer and tablets, patio and outdoor living, lawn and garden, baby and kids, toys, home, health and beauty, appliances, and jewelry. The company was founded in 1984 and is headquartered in Marlborough, MA.