Critical Analysis: Stein Mart (OTCMKTS:SMRTQ) & Advance Auto Parts (NYSE:AAP)

Advance Auto Parts (NYSE:AAP) and Stein Mart (OTCMKTS:SMRTQ) are both consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, earnings, profitability, dividends, valuation and analyst recommendations.

Analyst Ratings

This is a summary of current recommendations and price targets for Advance Auto Parts and Stein Mart, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Advance Auto Parts	1	18	2	0	2.05
Stein Mart	0	0	0	0	0.00

Advance Auto Parts currently has a consensus target price of $50.19, suggesting a potential upside of 16.93%. Given Advance Auto Parts’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Advance Auto Parts is more favorable than Stein Mart.

Institutional & Insider Ownership

88.7% of Advance Auto Parts shares are held by institutional investors. 0.8% of Advance Auto Parts shares are held by company insiders. Comparatively, 39.4% of Stein Mart 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.

Profitability

This table compares Advance Auto Parts and Stein Mart’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Advance Auto Parts	0.97%	9.84%	1.83%
Stein Mart	N/A	N/A	N/A

Earnings & Valuation

This table compares Advance Auto Parts and Stein Mart”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Advance Auto Parts	$8.60 billion	0.30	$44.00 million	$1.37	31.33
Stein Mart	N/A	N/A	N/A	N/A	N/A

Advance Auto Parts has higher revenue and earnings than Stein Mart.

Summary

Advance Auto Parts beats Stein Mart on 8 of the 9 factors compared between the two stocks.

About Advance Auto Parts

Advance Auto Parts, Inc. provides automotive replacement parts, accessories, batteries, and maintenance items for domestic and imported cars, vans, sport utility vehicles, and light and heavy duty trucks. The company offers battery accessories; belts and hoses; brakes and brake pads; chassis and climate control parts; clutches and drive shafts; engines and engine parts; exhaust systems and parts; hub assemblies; ignition components and wires; radiators and cooling parts; starters and alternators; and steering and alignment parts. It also offers air conditioning chemicals and accessories; air fresheners; antifreeze and washer fluids; electrical wires and fuses; electronics; floor mats, seat covers, and interior accessories; hand and specialty tools; lighting products; performance parts; sealants, adhesives, and compounds; tire repair accessories; vent shades, mirrors and exterior accessories; washes, waxes and cleaning supplies; and wiper blades. In addition, the company offers air filters; fuel and oil additives; fuel filters; grease and lubricants; motor oils; oil filters, part cleaners and treatments; and transmission fluids for engine maintenance. Further, it offers battery and wiper installation; engine light scanning and checking; electrical system testing, including batteries, starters, and alternators; oil and battery recycling; and loaner tool program services. Additionally, the company sells its products through its website. It serves professional installers and do-it-yourself customers. The company operates stores under the Advance Auto Parts and Carquest names, as well as branches under the Worldpac name. The company has stores in the United States, Puerto Rico, the U.S. Virgin Islands, and Canada; and independently owned Carquest branded stores in Mexico and various Caribbean Islands. Advance Auto Parts, Inc. was founded in 1929 and is based in Raleigh, North Carolina.

About Stein Mart

Stein Mart, Inc., a specialty omnichannel off-price retailer, offers designer and name-brand fashion apparels, home décor merchandise, accessories, and shoes at everyday discount prices in the United States. The company's stores also provides endless aisle, a mobile technology to locate products; a SMart Rewards loyalty program; co-branded and private label credit card programs; and electronic gift cards. As of June 3, 2020, it operated 281 stores in 30 states. The company also sells its products through an online retail selling site. Stein Mart, Inc. was founded in 1908 and is headquartered in Jacksonville, Florida. On August 12, 2020, Stein Mart, Inc., along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Middle District of Florida.