Grocery Outlet (NASDAQ:GO) and Krispy Kreme (NASDAQ:DNUT) Head to Head Survey

Krispy Kreme (NASDAQ:DNUT) and Grocery Outlet (NASDAQ:GO) are both small-cap consumer staples companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, profitability, institutional ownership, risk, analyst recommendations, earnings and valuation.

Volatility & Risk

Krispy Kreme has a beta of 1.31, indicating that its stock price is 31% more volatile than the S&P 500. Comparatively, Grocery Outlet has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500.

Institutional and Insider Ownership

81.7% of Krispy Kreme shares are held by institutional investors. Comparatively, 99.9% of Grocery Outlet shares are held by institutional investors. 3.0% of Krispy Kreme shares are held by insiders. Comparatively, 4.5% of Grocery Outlet shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings for Krispy Kreme and Grocery Outlet, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Krispy Kreme	2	6	4	0	2.17
Grocery Outlet	2	7	4	0	2.15

Krispy Kreme presently has a consensus target price of $5.51, indicating a potential upside of 28.84%. Grocery Outlet has a consensus target price of $14.86, indicating a potential upside of 44.73%. Given Grocery Outlet’s higher possible upside, analysts clearly believe Grocery Outlet is more favorable than Krispy Kreme.

Earnings & Valuation

This table compares Krispy Kreme and Grocery Outlet”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Krispy Kreme	$1.67 billion	0.44	$3.10 million	($2.99)	-1.43
Grocery Outlet	$4.57 billion	0.22	$39.47 million	($0.05)	-205.40

Grocery Outlet has higher revenue and earnings than Krispy Kreme. Grocery Outlet is trading at a lower price-to-earnings ratio than Krispy Kreme, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Krispy Kreme and Grocery Outlet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Krispy Kreme	-33.27%	-5.13%	-1.67%
Grocery Outlet	-0.10%	5.86%	2.13%

Summary

Grocery Outlet beats Krispy Kreme on 9 of the 13 factors compared between the two stocks.

About Krispy Kreme

Krispy Kreme, Inc., together with its subsidiaries, produces doughnuts in the United States, the United Kingdom, Ireland, Australia, New Zealand, Mexico, Canada, Japan, and internationally. The company operates through three segments: U.S., International, and Market Development. The company offers doughnut experiences through hot light theater and fresh shops, delivered fresh daily branded cabinets and merchandising units within grocery and convenience stores, quick service restaurants, club memberships, drug stores, and ecommerce, as well as through its branded sweet treat line comprising Krispy Kreme branded sweet treats. It also provides cookies under the Insomnia Cookies brand, cookie cakes, ice cream, cookie-wiches, and brownies; and operates Krispy Kreme company-owned shops and franchise shops. The company was formerly known as Krispy Kreme Doughnuts, Inc. and changed its name to Krispy Kreme, Inc. in May 2021. Krispy Kreme, Inc. was founded in 1937 and is based in Charlotte, North Carolina.

About Grocery Outlet

Grocery Outlet Holding Corp. operates as a retailer of consumables and fresh products sold through independently operated stores in the United States. Its stores offer products in various categories, such as dairy and deli, produce, floral, fresh meat, seafood products, grocery, general merchandise, health and beauty care, frozen food, beer and wine, and ethnic products. The company was founded in 1946 and is headquartered in Emeryville, California.