Target (NYSE:TGT) vs. US Foods (NYSE:USFD) Critical Review

US Foods (NYSE:USFD) and Target (NYSE:TGT) are both large-cap consumer staples companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Analyst Recommendations

This is a summary of current ratings and target prices for US Foods and Target, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
US Foods	0	4	11	0	2.73
Target	3	18	11	0	2.25

US Foods presently has a consensus price target of $113.92, suggesting a potential upside of 23.79%. Target has a consensus price target of $159.52, suggesting a potential upside of 3.44%. Given US Foods’ stronger consensus rating and higher possible upside, equities research analysts clearly believe US Foods is more favorable than Target.

Volatility & Risk

US Foods has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500. Comparatively, Target has a beta of 0.99, meaning that its stock price is 1% less volatile than the S&P 500.

Earnings & Valuation

This table compares US Foods and Target”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
US Foods	$39.42 billion	0.51	$676.00 million	$3.25	28.32
Target	$104.78 billion	0.67	$3.71 billion	$9.63	16.01

Target has higher revenue and earnings than US Foods. Target is trading at a lower price-to-earnings ratio than US Foods, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares US Foods and Target’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
US Foods	1.81%	20.53%	6.32%
Target	4.08%	23.23%	6.41%

Insider & Institutional Ownership

98.8% of US Foods shares are owned by institutional investors. Comparatively, 79.7% of Target shares are owned by institutional investors. 0.7% of US Foods shares are owned by company insiders. Comparatively, 0.1% of Target shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Target beats US Foods on 8 of the 13 factors compared between the two stocks.

About US Foods

US Foods Holding Corp., together with its subsidiaries, engages in marketing, sale, and distribution of fresh, frozen, and dry food and non-food products to foodservice customers in the United States. The company's customers include independently owned single and multi-unit restaurants, regional concepts, national restaurant chains, hospitals, nursing homes, hotels and motels, country clubs, government and military organizations, colleges and universities, and retail locations. The company was formerly known as USF Holding Corp. and changed its name to US Foods Holding Corp. in February 2016. US Foods Holding Corp. was incorporated in 2007 and is headquartered in Rosemont, Illinois.

About Target

Target Corporation operates as a general merchandise retailer in the United States. The company offers apparel for women, men, boys, girls, toddlers, and infants and newborns, as well as jewelry, accessories, and shoes; and beauty and personal care, baby gear, cleaning, paper products, and pet supplies. It also provides dry grocery, dairy, frozen food, beverages, candy, snacks, deli, bakery, meat, and food service; electronics, which includes video game hardware and software, toys, entertainment, sporting goods, and luggage; and furniture, lighting, storage, kitchenware, small appliances, home decor, bed and bath, home improvement, school/office supplies, greeting cards and party supplies, and other seasonal merchandise. In addition, the company sells merchandise through periodic design and creative partnerships, and shop-in-shop experience; and in-store amenities. Further, it sells its products through its stores; and digital channels, including Target.com. Target Corporation was incorporated in 1902 and is headquartered in Minneapolis, Minnesota.