Reviewing PetMed Express (PETS) and Rite Aid Corporation (NYSE:RAD)

Rite Aid Corporation (NYSE: RAD) and PetMed Express (NASDAQ:PETS) are both retail/wholesale companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, risk, institutional ownership, valuation and profitability.

Institutional and Insider Ownership

54.8% of Rite Aid Corporation shares are held by institutional investors. Comparatively, 79.1% of PetMed Express shares are held by institutional investors. 2.3% of Rite Aid Corporation shares are held by company insiders. Comparatively, 4.0% of PetMed Express shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

PetMed Express pays an annual dividend of $0.80 per share and has a dividend yield of 1.8%. Rite Aid Corporation does not pay a dividend. PetMed Express pays out 61.5% of its earnings in the form of a dividend.

Risk & Volatility

Rite Aid Corporation has a beta of 1.82, indicating that its stock price is 82% more volatile than the S&P 500. Comparatively, PetMed Express has a beta of 0.99, indicating that its stock price is 1% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Rite Aid Corporation and PetMed Express, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rite Aid Corporation 2 3 2 0 2.00
PetMed Express 0 2 1 0 2.33

Rite Aid Corporation presently has a consensus target price of $4.19, indicating a potential upside of 88.81%. PetMed Express has a consensus target price of $54.00, indicating a potential upside of 21.92%. Given Rite Aid Corporation’s higher possible upside, equities analysts clearly believe Rite Aid Corporation is more favorable than PetMed Express.

Profitability

This table compares Rite Aid Corporation and PetMed Express’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rite Aid Corporation -0.21% 0.52% 0.03%
PetMed Express 10.34% 28.67% 24.50%

Valuation & Earnings

This table compares Rite Aid Corporation and PetMed Express’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Rite Aid Corporation $32.44 billion 0.07 $999.93 million ($0.07) -31.71
PetMed Express $256.35 million 3.51 $43.21 million $1.30 34.07

Rite Aid Corporation has higher revenue and earnings than PetMed Express. Rite Aid Corporation is trading at a lower price-to-earnings ratio than PetMed Express, indicating that it is currently the more affordable of the two stocks.

Summary

PetMed Express beats Rite Aid Corporation on 9 of the 15 factors compared between the two stocks.

Rite Aid Corporation Company Profile

Rite Aid Corporation is a retail drugstore chain. The Company’s segments include Retail Pharmacy and Pharmacy Services. The Company operates under The Rite Aid name. It operates approximately 4,560 stores in over 30 states across the country and in the District of Columbia. The Company’s Retail Pharmacy segment consists of Rite Aid stores, RediClinic and Health Dialog. It sells brand and generic prescription drugs, as well as an assortment of front-end products, including health and beauty aids, personal care products, seasonal merchandise, and a private brand product line. Its front-end products include over-the-counter medications, health and beauty aids, personal care items, cosmetics, household items, food and beverages, greeting cards, seasonal merchandise and numerous other everyday and convenience products. The Company’s Pharmacy Services segment consists of EnvisionRx, which provides a range of pharmacy benefit services.

PetMed Express Company Profile

PetMed Express, Inc. (PetMed Express), doing business as 1800PetMeds, is a pet pharmacy. The Company markets prescription and non-prescription pet medications, and other health products for dogs and cats, direct to the consumer. It offers a selection of products for dogs and cats. Its product line contains approximately 3,000 stock keeping units (SKUS) of pet medications, health products and supplies. Its products include brands of medication, such as Frontline Plus, K9 Advantix II, Advantage II, Heartgard Plus, Sentinel, Revolution and Rimadyl. It also offers additional pet supplies for sale on its Website, which are drop shipped to its customers by third parties. These pet supplies include food, beds, crates, stairs, strollers and other pet supplies. Its products included Non-Prescription Medications (Over the Counter (OTC)) and supplies, and Prescription Medications (Rx). Its customers are located in California, Florida, Texas, New York, Virginia and Georgia, among others.

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