Sprouts Farmers Market (NASDAQ: SFM) and Safeway (NYSE:SWY) are both mid-cap non-cyclical consumer goods & services companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, earnings, valuation, risk, analyst recommendations, profitability and institutional ownership.
This table compares Sprouts Farmers Market and Safeway’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Sprouts Farmers Market||3.40%||21.81%||9.07%|
This is a summary of current ratings and price targets for Sprouts Farmers Market and Safeway, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Sprouts Farmers Market||2||7||12||0||2.48|
Sprouts Farmers Market currently has a consensus target price of $26.94, indicating a potential upside of 6.61%. Given Sprouts Farmers Market’s higher probable upside, equities analysts plainly believe Sprouts Farmers Market is more favorable than Safeway.
Valuation & Earnings
This table compares Sprouts Farmers Market and Safeway’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Sprouts Farmers Market||$4.66 billion||0.72||$158.44 million||$1.01||25.02|
Sprouts Farmers Market has higher revenue and earnings than Safeway. Sprouts Farmers Market is trading at a lower price-to-earnings ratio than Safeway, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Sprouts Farmers Market has a beta of 0.84, indicating that its share price is 16% less volatile than the S&P 500. Comparatively, Safeway has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500.
Institutional & Insider Ownership
92.3% of Sprouts Farmers Market shares are held by institutional investors. 2.6% of Sprouts Farmers Market shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Sprouts Farmers Market beats Safeway on 9 of the 11 factors compared between the two stocks.
Sprouts Farmers Market Company Profile
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.
Safeway Company Profile
Safeway Inc., is an food and drug retail company. The Company owns and operates GroceryWorks.com Operating Company, LLC, an online grocery channel doing business under the names Safeway.com and Vons.com. Blackhawk, a majority-owned subsidiary of Safeway, is a prepaid payment network utilizing proprietary technology to offer gift cards, other prepaid products and payment services. Blackhawk’s payment network supports its three primary constituents: consumers who purchase the products and services Blackhawk offers, content providers who offer branded products that are redeemable for goods and services, and distribution partners who sell the products. Blackhawk’s product offerings include gift cards, prepaid telecom products and prepaid financial services products, including general purpose reloadable cards and Blackhawk’s reload network.
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