Head to Head Comparison: Monro Muffler Brake (NASDAQ:MNRO) vs. GAP (NYSE:GAP)

GAP (NYSE:GAP) and Monro Muffler Brake (NASDAQ:MNRO) are both consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, risk, earnings, valuation, institutional ownership and dividends.

Earnings and Valuation

This table compares GAP and Monro Muffler Brake”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GAP	$15.33 billion	0.54	$816.00 million	$3.35	7.01
Monro Muffler Brake	$1.16 billion	0.39	$2.17 million	$0.22	65.18

GAP has higher revenue and earnings than Monro Muffler Brake. GAP is trading at a lower price-to-earnings ratio than Monro Muffler Brake, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

58.8% of GAP shares are held by institutional investors. 31.0% of GAP shares are held by company insiders. Comparatively, 5.7% of Monro Muffler Brake shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

GAP pays an annual dividend of $0.70 per share and has a dividend yield of 3.0%. Monro Muffler Brake pays an annual dividend of $1.12 per share and has a dividend yield of 7.8%. GAP pays out 20.9% of its earnings in the form of a dividend. Monro Muffler Brake pays out 509.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. GAP has raised its dividend for 1 consecutive years.

Analyst Recommendations

This is a summary of current recommendations and price targets for GAP and Monro Muffler Brake, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GAP	1	12	5	2	2.40
Monro Muffler Brake	1	2	2	0	2.20

GAP currently has a consensus price target of $27.07, indicating a potential upside of 15.25%. Monro Muffler Brake has a consensus price target of $24.33, indicating a potential upside of 69.69%. Given Monro Muffler Brake’s higher possible upside, analysts clearly believe Monro Muffler Brake is more favorable than GAP.

Volatility & Risk

GAP has a beta of 2.05, indicating that its stock price is 105% more volatile than the S&P 500. Comparatively, Monro Muffler Brake has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500.

Profitability

This table compares GAP and Monro Muffler Brake’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GAP	8.14%	19.72%	5.94%
Monro Muffler Brake	0.71%	0.80%	0.30%

Summary

GAP beats Monro Muffler Brake on 15 of the 18 factors compared between the two stocks.

About GAP

Gap, Inc. operates as a global apparel retail company, which offers clothing, apparel, accessories, and personal care products for men, women, and children. The firm operates through the following segments: Gap Global, Old Navy Global, Banana Republic Global, Athleta, and Other. The Gap Global segment includes apparel and accessories for men and women under the Gap brand, along with the GapKids, BabyGap, GapMaternity, GapBody, and GapFit collections. The Old Navy Global segment offers clothing and accessories for adults and children. The Banana Republic Global segment provides clothing, eyewear, jewelry, shoes, handbags, and fragrances. The Athleta segment offers fitness apparel for women. The company founded by Donald G. Fisher and Doris F. Fisher in July 1969 and is headquartered in San Francisco, CA.

About Monro Muffler Brake

Monro, Inc. provides automotive undercar repair, and tire sales and services in the United States. It offers replacement tires and tire related services, automotive undercar repair services, and routine maintenance services primarily to passenger cars, light trucks, and vans. The company also provides other products and services for brakes; mufflers and exhaust systems; and steering, drive train, suspension, and wheel alignment. In addition, it operates stores under the brand names of Monro Auto Service and Tire Centers, Tire Choice Auto Service Centers, Mr. Tire Auto Service Centers, Car-X Tire & Auto, Tire Warehouse Tires for Less, Ken Towery's Tire & Auto Care, Mountain View Tire & Auto Service, and Tire Barn Warehouse. The company was founded in 1957 and is headquartered in Rochester, New York.