Critical Analysis: Weis Markets (WMK) and Its Competitors

Weis Markets (NYSE: WMK) is one of 23 publicly-traded companies in the “Food Retail & Distribution” industry, but how does it contrast to its peers? We will compare Weis Markets to related companies based on the strength of its institutional ownership, analyst recommendations, earnings, dividends, profitability, risk and valuation.

Volatility and Risk

Weis Markets has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500. Comparatively, Weis Markets’ peers have a beta of 0.93, meaning that their average stock price is 7% less volatile than the S&P 500.

Institutional and Insider Ownership

32.0% of Weis Markets shares are held by institutional investors. Comparatively, 62.8% of shares of all “Food Retail & Distribution” companies are held by institutional investors. 26.9% of Weis Markets shares are held by company insiders. Comparatively, 19.4% of shares of all “Food Retail & Distribution” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Weis Markets and its peers gross revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Weis Markets $3.40 billion $173.90 million 14.13
Weis Markets Competitors $21.46 billion $1.01 billion 39.21

Weis Markets’ peers have higher revenue and earnings than Weis Markets. Weis Markets is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Dividends

Weis Markets pays an annual dividend of $1.20 per share and has a dividend yield of 2.8%. Weis Markets pays out 39.3% of its earnings in the form of a dividend. As a group, “Food Retail & Distribution” companies pay a dividend yield of 2.5% and pay out 143.1% of their earnings in the form of a dividend. Weis Markets is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.

Profitability

This table compares Weis Markets and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Weis Markets 2.42% 8.89% 5.94%
Weis Markets Competitors 0.79% 32.77% 4.17%

Analyst Recommendations

This is a breakdown of current ratings for Weis Markets and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Weis Markets 0 0 0 0 N/A
Weis Markets Competitors 647 1351 1400 23 2.23

As a group, “Food Retail & Distribution” companies have a potential upside of 5.62%. Given Weis Markets’ peers higher possible upside, analysts plainly believe Weis Markets has less favorable growth aspects than its peers.

Summary

Weis Markets peers beat Weis Markets on 7 of the 12 factors compared.

Weis Markets Company Profile

Weis Markets, Inc. is engaged principally in the retail sale of food in Pennsylvania and surrounding states. The Company’s retail food stores sell groceries, dairy products, frozen foods, meats, seafood, fresh produce, floral, pharmacy services, deli products, prepared foods, bakery products, beer and wine, fuel and general merchandise items, such as health and beauty care and household products. As of December 31, 2016, it had owned and operated approximately 204 retail food stores. The majority of the Company’s stores are concentrated in central and northeast Pennsylvania, central Maryland, suburban Washington, District of Columbia and Baltimore regions and New York’s Southern Tier. As of December 31, 2016, it had operated four stores in Delaware, 50 stores in Maryland, five stores in New Jersey, nine stores in New York, 121 stores in Pennsylvania, 13 stores in Virginia and two stores in West Virginia, for a total of 204 retail food stores operating under the Weis Markets name.

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