Sprouts Farmers Market (NASDAQ: SFM) and SuperValu (NYSE:SVU) are both retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, valuation, risk, analyst recommendations and dividends.

Valuation and Earnings

This table compares Sprouts Farmers Market and SuperValu’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sprouts Farmers Market $4.34 billion 0.75 $295.71 million $0.90 26.82
SuperValu $12.72 billion 0.07 $461.00 million $16.03 1.42

SuperValu has higher revenue and earnings than Sprouts Farmers Market. SuperValu is trading at a lower price-to-earnings ratio than Sprouts Farmers Market, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for Sprouts Farmers Market and SuperValu, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sprouts Farmers Market 1 10 11 0 2.45
SuperValu 0 4 2 0 2.33

Sprouts Farmers Market currently has a consensus target price of $25.59, suggesting a potential upside of 6.00%. SuperValu has a consensus target price of $32.90, suggesting a potential upside of 44.49%. Given SuperValu’s higher probable upside, analysts plainly believe SuperValu is more favorable than Sprouts Farmers Market.

Profitability

This table compares Sprouts Farmers Market and SuperValu’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sprouts Farmers Market 2.96% 18.79% 8.65%
SuperValu 4.46% 220.54% 2.55%

Insider & Institutional Ownership

87.9% of Sprouts Farmers Market shares are owned by institutional investors. 2.6% of Sprouts Farmers Market shares are owned by insiders. Comparatively, 1.7% of SuperValu shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

Sprouts Farmers Market has a beta of 0.52, suggesting that its share price is 48% less volatile than the S&P 500. Comparatively, SuperValu has a beta of 2.06, suggesting that its share price is 106% more volatile than the S&P 500.

Sprouts Farmers Market Company Profile

Sprouts Farmers Market, Inc. is a food retailer. The Company operates as a grocery store that offers fresh, natural and organic food that includes fresh produce, bulk foods, vitamins and supplements, packaged groceries, meat and seafood, deli, baked goods, dairy products, frozen foods, body care and natural household items catering to consumers’ interest in health and wellness. As of February 23, 2017, the Company operated 256 stores in 14 states. The Company categorizes the varieties of products it sells as perishable and non-perishable. The perishable product categories include produce, meat, seafood, deli and bakery. Its non-perishable product categories include grocery, vitamins and supplements, bulk items, dairy and dairy alternatives, frozen foods, beer and wine, and natural health and body care.

SuperValu Company Profile

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 February 27, 2016, the Company conducted its Retail operations through a total of 200 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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