Kroger (NYSE: KR) and Supervalu (NYSE:SVU) are both retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, risk and valuation.
Insider and Institutional Ownership
75.7% of Kroger shares are owned by institutional investors. Comparatively, 90.6% of Supervalu shares are owned by institutional investors. 0.9% of Kroger shares are owned by insiders. Comparatively, 1.7% of Supervalu shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This is a breakdown of current ratings and recommmendations for Kroger and Supervalu, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Kroger presently has a consensus target price of $27.32, indicating a potential upside of 16.49%. Supervalu has a consensus target price of $24.21, indicating a potential upside of 62.19%. Given Supervalu’s higher possible upside, analysts plainly believe Supervalu is more favorable than Kroger.
This table compares Kroger and Supervalu’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk and Volatility
Kroger has a beta of 1.02, meaning that its stock price is 2% more volatile than the S&P 500. Comparatively, Supervalu has a beta of 1.52, meaning that its stock price is 52% more volatile than the S&P 500.
Earnings & Valuation
This table compares Kroger and Supervalu’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Kroger||$122.66 billion||0.17||$1.91 billion||$2.11||11.11|
|Supervalu||$12.48 billion||0.05||$650.00 million||$15.90||0.94|
Kroger has higher revenue and earnings than Supervalu. Supervalu is trading at a lower price-to-earnings ratio than Kroger, indicating that it is currently the more affordable of the two stocks.
Kroger pays an annual dividend of $0.50 per share and has a dividend yield of 2.1%. Supervalu does not pay a dividend. Kroger pays out 23.7% of its earnings in the form of a dividend. Kroger has raised its dividend for 9 consecutive years.
Kroger beats Supervalu on 10 of the 17 factors compared between the two stocks.
The Kroger Co. (Kroger) manufactures and processes food for sale in its supermarkets. The Company operates supermarkets, multi-department stores, jewelry stores and convenience stores throughout the United States. As of January 28, 2017, it had operated approximately 4,000 owned or leased supermarkets, convenience stores, fine jewelry stores, distribution warehouses and food production plants through divisions, subsidiaries or affiliates. These facilities are located throughout the United States. As of January 28, 2017, Kroger operated, either directly or through its subsidiaries, 2,796 supermarkets under a range of local banner names, of which 2,255 had pharmacies and 1,445 had fuel centers. As of January 28, 2017, the Company offered ClickList and Harris Teeter ExpressLane, personalized, order online, pick up at the store services at 637 of its supermarkets. P$$T, Check This Out and Heritage Farm are the three brands. Its other brands include Simple Truth and Simple Truth Organic.
Supervalu Inc. is a wholesale distributor to independent retail customers across the United States. The Company’s segments include Wholesale and Retail. The Company offers a range of advertised brand name and private-label products, including grocery (both perishable and nonperishable), general merchandise and home, health and beauty care, and pharmacy, which are sold through Company-operated and licensed Retail stores to shoppers and through its Wholesale segment to independent retail customers. The Company’s Wholesale segment provides wholesale distribution of products to independent retail customers. Wholesale is organized and operated through two geographic regions: East and West. As of September 9, 2017, the Company conducted its Retail operations through a total of 217 stores primarily organized under five regionally-based retail banners of Cub Foods, Shoppers Food & Pharmacy, Shop ‘n Save, Farm Fresh and Hornbacher’s, as well as two Rainbow and two County Market stores.
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