Magazine Luiza (OTCMKTS:MGLUY) versus Group 1 Automotive (NYSE:GPI) Critical Comparison

Group 1 Automotive (NYSE:GPI) and Magazine Luiza (OTCMKTS:MGLUY) are both consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, earnings, institutional ownership, analyst recommendations, risk and dividends.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Group 1 Automotive and Magazine Luiza, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Group 1 Automotive	0	4	6	0	2.60
Magazine Luiza	0	1	0	0	2.00

Group 1 Automotive currently has a consensus target price of $420.22, indicating a potential upside of 43.77%. Given Group 1 Automotive’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Group 1 Automotive is more favorable than Magazine Luiza.

Insider & Institutional Ownership

99.9% of Group 1 Automotive shares are held by institutional investors. 2.4% of Group 1 Automotive shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Group 1 Automotive and Magazine Luiza’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Group 1 Automotive	1.31%	15.66%	4.43%
Magazine Luiza	N/A	N/A	N/A

Earnings and Valuation

This table compares Group 1 Automotive and Magazine Luiza”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Group 1 Automotive	$22.57 billion	0.15	$325.20 million	$24.01	12.17
Magazine Luiza	N/A	N/A	N/A	N/A	N/A

Group 1 Automotive has higher revenue and earnings than Magazine Luiza.

Summary

Group 1 Automotive beats Magazine Luiza on 9 of the 9 factors compared between the two stocks.

About Group 1 Automotive

Group 1 Automotive, Inc., through its subsidiaries, operates in the automotive retail industry in the United States and the United Kingdom. The company sells new and used cars, light trucks, and vehicle parts, as well as service and insurance contracts; arranges related vehicle financing; and offers automotive maintenance and repair services. Group 1 Automotive, Inc. was incorporated in 1995 and is headquartered in Houston, Texas.

About Magazine Luiza

Magazine Luiza S.A. engages in the retail sale of consumer goods. It operates through Retail, Financial Operations, Insurance Operations, and Other Services segments. The company also grants credit and provides extended warranties for its products. In addition, it is involved in the provision of consortium and management services; and e-commerce of perfumes, cosmetics, sports, and fashion products, as well as product delivery management and software development services. Further, the company provides integration, logistics, and technological solutions, as well as resale goods and provision of services in the stores, electronic and food delivery management platform. It serves through physical stores, e-commerce platform, and SuperApp. The company was founded in 1957 and is headquartered in Franca, Brazil. Magazine Luiza S.A. operates as a subsidiary of LTD Administração e Participação S.A.