Performance Food Group (NYSE: PFGC) and Sprouts Farmers Market (NASDAQ:SFM) are both mid-cap retail/wholesale companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, dividends and profitability.

Earnings & Valuation

This table compares Performance Food Group and Sprouts Farmers Market’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Performance Food Group $16.76 billion 0.18 $342.30 million $0.93 30.38
Sprouts Farmers Market $4.34 billion 0.58 $295.71 million $0.90 20.73

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

Volatility and Risk

Performance Food Group has a beta of -0.27, suggesting that its share price is 127% less volatile than the S&P 500. Comparatively, Sprouts Farmers Market has a beta of 0.54, suggesting that its share price is 46% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Performance Food Group 0.57% 14.73% 3.48%
Sprouts Farmers Market 2.96% 18.79% 8.65%

Institutional and Insider Ownership

78.7% of Performance Food Group shares are owned by institutional investors. Comparatively, 87.7% of Sprouts Farmers Market shares are owned by institutional investors. 3.7% of Performance Food Group shares are owned by company insiders. Comparatively, 2.6% of Sprouts Farmers Market shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Performance Food Group and Sprouts Farmers Market, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Performance Food Group 0 6 5 0 2.45
Sprouts Farmers Market 1 10 10 0 2.43

Performance Food Group presently has a consensus price target of $29.00, suggesting a potential upside of 2.65%. Sprouts Farmers Market has a consensus price target of $25.13, suggesting a potential upside of 34.65%. Given Sprouts Farmers Market’s higher probable upside, analysts plainly believe Sprouts Farmers Market is more favorable than Performance Food Group.

Summary

Sprouts Farmers Market beats Performance Food Group on 8 of the 14 factors compared between the two stocks.

About Performance Food Group

Performance Food Group Company, through its subsidiaries, markets and distributes food and food-related products. The Company operates through three segments: Performance Foodservice, PFG Customized and Vistar. The Performance Foodservice segment distributes a range of national brands, customer brands, and branded food and food-related products. It sells to independent or street, and multi-unit or chain, restaurants and other institutions. Its PFG Customized segment provides service to family and casual dining restaurant chains, and fast casual and quick service restaurant chains. Its Vistar segment specializes in distributing candy, snacks, beverages and other items nationally to the vending, office coffee service, theater, hospitality and other channels. Its products include a range of frozen foods, such as meats, fully prepared appetizers and entrees, and desserts; a range of canned and dry foods; fresh meats; dairy products; beverage products, and snack and other products.

About Sprouts Farmers Market

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.

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