Critical Survey: Ingles Markets (NASDAQ:IMKTA) and Raia Drogasil (OTCMKTS:RADLY)

Ingles Markets (NASDAQ:IMKTA) and Raia Drogasil (OTCMKTS:RADLY) are both consumer staples companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.

Profitability

This table compares Ingles Markets and Raia Drogasil’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ingles Markets	1.92%	6.30%	4.01%
Raia Drogasil	2.97%	18.20%	5.32%

Analyst Recommendations

This is a breakdown of recent recommendations for Ingles Markets and Raia Drogasil, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ingles Markets	0	0	1	0	3.00
Raia Drogasil	0	1	0	0	2.00

Institutional & Insider Ownership

62.5% of Ingles Markets shares are held by institutional investors. 22.8% of Ingles Markets shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Ingles Markets and Raia Drogasil”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ingles Markets	$5.33 billion	0.31	$83.59 million	$5.47	15.84
Raia Drogasil	$7.93 billion	0.62	$232.27 million	$0.05	75.20

Raia Drogasil has higher revenue and earnings than Ingles Markets. Ingles Markets is trading at a lower price-to-earnings ratio than Raia Drogasil, indicating that it is currently the more affordable of the two stocks.

Dividends

Ingles Markets pays an annual dividend of $0.66 per share and has a dividend yield of 0.8%. Raia Drogasil pays an annual dividend of $0.04 per share and has a dividend yield of 1.1%. Ingles Markets pays out 12.1% of its earnings in the form of a dividend. Raia Drogasil pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Raia Drogasil beats Ingles Markets on 8 of the 14 factors compared between the two stocks.

About Ingles Markets

Ingles Markets, Incorporated, together with its subsidiaries, operates a chain of supermarkets in the southeast United States. It offers food products, including grocery, meat and dairy products, produce, frozen foods, and other perishables; and non-food products, which include fuel centers, pharmacies, health and beauty care products, and general merchandise, as well as private label items. The company owns and operates a milk processing and packaging plant that supplies organic milk, fruit juices, and bottled water products to other retailers, food service distributors, and grocery warehouses. In addition, it provides home meal replacement items, delicatessens, bakeries, floral departments, and greeting cards, as well as broad selections of local organic, beverage, and health-related items. The company operates under the Ingles and Sav-Mor brand names. Ingles Markets, Incorporated was founded in 1963 and is headquartered in Asheville, North Carolina.

About Raia Drogasil

Raia Drogasil S.A. engages in the retail sale of medicines, perfumery, personal care and beauty products, cosmetics, dermocosmetics, and specialty medicines in Brazil. It also markets its goods through telesales and call centers in the states of São Paulo, Tocantins, and Pernambuco. The company was founded in 1905 and is headquartered in São Paulo, Brazil.