Financial Contrast: Sonic Automotive (SAH) & TravelCenters of America (TA)
Sonic Automotive (NYSE: SAH) and TravelCenters of America (NASDAQ:TA) are both small-cap retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, profitability, analyst recommendations, earnings and valuation.
This table compares Sonic Automotive and TravelCenters of America’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|TravelCenters of America||0.46%||-5.55%||-1.89%|
Sonic Automotive has a beta of 1.61, meaning that its share price is 61% more volatile than the S&P 500. Comparatively, TravelCenters of America has a beta of 1.65, meaning that its share price is 65% more volatile than the S&P 500.
This is a breakdown of current recommendations and price targets for Sonic Automotive and TravelCenters of America, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|TravelCenters of America||0||1||2||0||2.67|
Sonic Automotive presently has a consensus target price of $23.33, indicating a potential upside of 7.78%. TravelCenters of America has a consensus target price of $7.67, indicating a potential upside of 112.96%. Given TravelCenters of America’s stronger consensus rating and higher probable upside, analysts clearly believe TravelCenters of America is more favorable than Sonic Automotive.
Institutional & Insider Ownership
63.6% of Sonic Automotive shares are held by institutional investors. Comparatively, 31.3% of TravelCenters of America shares are held by institutional investors. 32.3% of Sonic Automotive shares are held by company insiders. Comparatively, 3.8% of TravelCenters of America shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Sonic Automotive pays an annual dividend of $0.24 per share and has a dividend yield of 1.1%. TravelCenters of America does not pay a dividend. Sonic Automotive pays out 13.0% of its earnings in the form of a dividend. Sonic Automotive has increased its dividend for 2 consecutive years.
Valuation & Earnings
This table compares Sonic Automotive and TravelCenters of America’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Sonic Automotive||$9.87 billion||0.09||$92.98 million||$1.85||11.70|
|TravelCenters of America||$6.05 billion||0.02||$9.26 million||($0.30)||-12.00|
Sonic Automotive has higher revenue and earnings than TravelCenters of America. TravelCenters of America is trading at a lower price-to-earnings ratio than Sonic Automotive, indicating that it is currently the more affordable of the two stocks.
Sonic Automotive beats TravelCenters of America on 12 of the 17 factors compared between the two stocks.
Sonic Automotive Company Profile
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.
TravelCenters of America Company Profile
TravelCenters of America LLC operates travel centers and convenience stores in the United States and Canada. It operates in two segments, Travel Centers and Convenience Stores. Its travel centers offer a range of products and services, including diesel fuel and gasoline, as well as nonfuel products and services, such as truck repair and maintenance services, full service restaurants, quick service restaurants (QSR), and various customer amenities. As of December 31, 2017, it operated 256 travel centers under the TravelCenters of America, TA, Petro Stopping Centers, and Petro brand names. The company's convenience stores offer gasoline, as well as various nonfuel products and services, including coffee, groceries, and fresh foods, as well as a QSR and/or car wash. As of December 31, 2017, the company operated 233 convenience stores under the Minit Mart brand name. The company serves trucking fleets and their drivers, independent truck drivers, highway and local motorists, and casual diners. TravelCenters of America LLC was founded in 1992 and is headquartered in Westlake, Ohio.
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