DavidsTea (NASDAQ: DTEA) and Sainsbury’s (OTCMKTS:JSAIY) are both consumer staples companies, but which is the better stock? We will compare the two companies based on the strength of their risk, institutional ownership, analyst recommendations, earnings, dividends, valuation and profitability.

Volatility and Risk

DavidsTea has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500. Comparatively, Sainsbury’s has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500.

Institutional and Insider Ownership

12.0% of DavidsTea shares are owned by institutional investors. Comparatively, 0.3% of Sainsbury’s shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Sainsbury’s pays an annual dividend of $0.47 per share and has a dividend yield of 3.2%. DavidsTea does not pay a dividend. Sainsbury’s pays out 43.9% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for DavidsTea and Sainsbury’s, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DavidsTea 0 1 0 0 2.00
Sainsbury’s 0 1 2 0 2.67

DavidsTea currently has a consensus price target of $4.00, suggesting a potential upside of 6.70%. Given DavidsTea’s higher probable upside, equities research analysts clearly believe DavidsTea is more favorable than Sainsbury’s.

Profitability

This table compares DavidsTea and Sainsbury’s’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DavidsTea -12.89% 0.07% 0.05%
Sainsbury’s N/A N/A N/A

Earnings & Valuation

This table compares DavidsTea and Sainsbury’s’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
DavidsTea $173.64 million 0.56 -$4.83 million N/A N/A
Sainsbury’s $34.30 billion 0.24 $492.85 million $1.07 13.79

Sainsbury’s has higher revenue and earnings than DavidsTea.

Summary

Sainsbury’s beats DavidsTea on 7 of the 13 factors compared between the two stocks.

About DavidsTea

DAVIDsTEA Inc. is engaged in the retail and online sale of tea, tea accessories, and food and beverages in Canada and in the United States. The Company’s segments include Canada and the U.S. The Company is a branded retailer of specialty tea, offering approximately 150 loose-leaf teas, pre-packaged teas, tea sachets and tea-related gifts, accessories, and food and beverages primarily through approximately 190 DAVIDsTEA stores, which are operated by the Company, and its Website, davidstea.com. Additionally, the Company offers on-the-go tea beverages in its retail stores. The Company’s tea accessories include tea mugs, travel mugs, teacup sets, teapots, tea makers, kettles, infusers, filters, frothers, tins and spoons. The Company offers beverages range from the standard hot or iced tea to its Tea Lattes. The Company’s different flavors of loose-leaf tea span eight tea categories: white, green, oolong, black, pu’erh, mate, rooibos and herbal tea.

About Sainsbury’s

J Sainsbury plc, together with its subsidiaries, engages in the food, general merchandise and clothing retailing, and financial services activities in the United Kingdom. It operates through four segments: Retail ? Food; Retail ? General Merchandise & Clothing; Financial Services; and Property Investment. The company operates various store formats, including convenience stores and supermarkets, as well as offers organic produce under the Food to Go and FreeFrom names. It is also involved in an online grocery and general merchandise operations; and provides home, clothing, technology, leisure, toy, and electrical products, as well as groceries and loyalty programs, and energy solutions. As of March 11, 2017, the company operated 605 supermarkets and 809 convenience stores, as well as 59 Argos Digital stores, 11 Habitat stores, and 207 Digital Collection points. In addition, the company invests in and develops real estate properties; and offers financial services, such as loans portfolio comprising credit cards and storecards, personal loans, insurance, and travel money. J Sainsbury plc was founded in 1869 and is headquartered in London, the United Kingdom.

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