Casey’s General Stores (CASY) versus Sonic Automotive (SAH) Head to Head Review

Casey’s General Stores (NASDAQ:CASY) and Sonic Automotive (NYSE:SAH) are both retail/wholesale companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, earnings, profitability, institutional ownership and dividends.

Earnings & Valuation

This table compares Casey’s General Stores and Sonic Automotive’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Casey’s General Stores $8.39 billion 0.54 $317.90 million $3.81 32.47
Sonic Automotive $9.87 billion 0.08 $92.98 million $1.85 9.44

Casey’s General Stores has higher earnings, but lower revenue than Sonic Automotive. Sonic Automotive is trading at a lower price-to-earnings ratio than Casey’s General Stores, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and price targets for Casey’s General Stores and Sonic Automotive, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Casey’s General Stores 0 5 5 0 2.50
Sonic Automotive 1 2 0 0 1.67

Casey’s General Stores presently has a consensus price target of $133.00, indicating a potential upside of 7.51%. Sonic Automotive has a consensus price target of $19.25, indicating a potential upside of 10.25%. Given Sonic Automotive’s higher possible upside, analysts clearly believe Sonic Automotive is more favorable than Casey’s General Stores.

Volatility & Risk

Casey’s General Stores has a beta of 0.49, meaning that its share price is 51% less volatile than the S&P 500. Comparatively, Sonic Automotive has a beta of 1.62, meaning that its share price is 62% more volatile than the S&P 500.

Insider and Institutional Ownership

95.7% of Casey’s General Stores shares are owned by institutional investors. Comparatively, 63.7% of Sonic Automotive shares are owned by institutional investors. 0.7% of Casey’s General Stores shares are owned by insiders. Comparatively, 32.3% of Sonic Automotive shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

Casey’s General Stores pays an annual dividend of $1.16 per share and has a dividend yield of 0.9%. Sonic Automotive pays an annual dividend of $0.24 per share and has a dividend yield of 1.4%. Casey’s General Stores pays out 30.4% of its earnings in the form of a dividend. Sonic Automotive pays out 13.0% 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. Casey’s General Stores has raised its dividend for 15 consecutive years and Sonic Automotive has raised its dividend for 2 consecutive years. Sonic Automotive is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Casey’s General Stores and Sonic Automotive’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Casey’s General Stores 3.73% 12.38% 4.51%
Sonic Automotive 0.95% 10.42% 2.14%

Summary

Casey’s General Stores beats Sonic Automotive on 11 of the 17 factors compared between the two stocks.

About Casey’s General Stores

Casey's General Stores, Inc., together with its subsidiaries, operates convenience stores under the Casey's and Casey's General Store names. The company's stores offer a selection of food, including freshly prepared foods, such as pizza, donuts, and sandwiches; beverage and tobacco products; health and beauty aids; automotive products; school supplies, housewares, and pet supplies; and other nonfood items. Its stores also provide fuel for sale on a self-service basis. In addition, the company operates two stores under the Tobacco City name primarily selling tobacco products; and one grocery store. As of April 30, 2018, it operated a total of 2,073 stores in 16 Midwest states. Casey's General Stores, Inc. was founded in 1959 and is headquartered in Ankeny, Iowa.

About Sonic Automotive

Sonic Automotive, Inc. operates as an automotive retailer in the United States. It operates in two segments, Franchised Dealerships and Pre-Owned Stores. The Franchised Dealerships segment is involved in the sale of new and used cars and light trucks, and replacement parts; provision of vehicle maintenance, manufacturer warranty repair, and paint and collision repair services; and arrangement of extended warranties, service contracts, financing, insurance, and other aftermarket products. The Pre-Owned Stores segment operates stand-alone pre-owned specialty retail locations, which enable customers to search, buy, service, finance, and sell pre-owned vehicles. As of December 31, 2017, the company operated 114 new vehicle franchises in 13 states representing 25 brands of cars and light trucks; 18 collision repair centers; and 9 pre-owned vehicle stores. Sonic Automotive, Inc. was founded in 1997 and is based in Charlotte, North Carolina.

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