KAR Auction Services (KAR) and Its Competitors Head to Head Review

KAR Auction Services (NYSE: KAR) is one of 20 publicly-traded companies in the “Automotive dealers & gasoline service stations” industry, but how does it weigh in compared to its competitors? We will compare KAR Auction Services to related companies based on the strength of its risk, institutional ownership, dividends, valuation, profitability, analyst recommendations and earnings.

Profitability

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This table compares KAR Auction Services and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
KAR Auction Services 10.47% 23.61% 4.99%
KAR Auction Services Competitors 3.22% 33.52% 3.60%

Institutional and Insider Ownership

98.9% of KAR Auction Services shares are owned by institutional investors. Comparatively, 62.1% of shares of all “Automotive dealers & gasoline service stations” companies are owned by institutional investors. 1.3% of KAR Auction Services shares are owned by insiders. Comparatively, 16.5% of shares of all “Automotive dealers & gasoline service stations” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

KAR Auction Services pays an annual dividend of $1.40 per share and has a dividend yield of 2.6%. KAR Auction Services pays out 56.0% of its earnings in the form of a dividend. As a group, “Automotive dealers & gasoline service stations” companies pay a dividend yield of 1.6% and pay out 20.5% of their earnings in the form of a dividend. KAR Auction Services has increased its dividend for 5 consecutive years.

Volatility & Risk

KAR Auction Services has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500. Comparatively, KAR Auction Services’ competitors have a beta of 9.96, meaning that their average stock price is 896% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for KAR Auction Services and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
KAR Auction Services 0 2 7 0 2.78
KAR Auction Services Competitors 115 620 667 28 2.43

KAR Auction Services currently has a consensus target price of $58.63, indicating a potential upside of 9.19%. As a group, “Automotive dealers & gasoline service stations” companies have a potential upside of 15.96%. Given KAR Auction Services’ competitors higher probable upside, analysts plainly believe KAR Auction Services has less favorable growth aspects than its competitors.

Earnings & Valuation

This table compares KAR Auction Services and its competitors gross revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
KAR Auction Services $3.46 billion $362.00 million 21.49
KAR Auction Services Competitors $8.01 billion $220.42 million 12.16

KAR Auction Services’ competitors have higher revenue, but lower earnings than KAR Auction Services. KAR Auction Services is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Summary

KAR Auction Services beats its competitors on 8 of the 15 factors compared.

About KAR Auction Services

KAR Auction Services, Inc. is a provider of whole car auction services in North America, and salvage auction services in North America and the United Kingdom. The Company operates through three segments: ADESA, Inc. (ADESA Auctions or ADESA), Insurance Auto Auctions, Inc. (IAA) and Automotive Finance Corporation (AFC). The ADESA segment is a provider of whole car auctions and related services to the vehicle remarketing industry in North America. It serves its customer base through online auctions and auction facilities that are developed and located to draw professional sellers and buyers together, and allow the buyers to inspect and compare vehicles remotely or in person. As a provider of salvage vehicle auctions and related services, it operates as IAA in the United States and Impact Auto Auctions in Canada, and serves customer base through salvage auction locations throughout North America. The AFC segment provides floorplan financing to independent used vehicle dealers.

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