Critical Contrast: Smart (SFS) vs. Ingles Markets, (IMKTA)

Ingles Markets, (NASDAQ: IMKTA) and Smart (NYSE:SFS) are both small-cap retail/wholesale companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitabiliy, valuation and risk.

Valuation & Earnings

This table compares Ingles Markets, and Smart’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ingles Markets, $3.85 billion 0.11 $230.63 million $2.46 11.97
Smart $4.40 billion 0.15 $132.37 million $0.12 72.92

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

Analyst Ratings

This is a summary of recent recommendations and price targets for Ingles Markets, and Smart, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ingles Markets, 0 0 0 0 N/A
Smart 1 5 5 0 2.36

Smart has a consensus price target of $20.00, suggesting a potential upside of 128.57%. Given Smart’s higher possible upside, analysts clearly believe Smart is more favorable than Ingles Markets,.

Risk and Volatility

Ingles Markets, has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500. Comparatively, Smart has a beta of 0.3, meaning that its share price is 70% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Ingles Markets, 1.20% 9.73% 2.71%
Smart 0.21% 4.14% 1.19%

Institutional and Insider Ownership

58.9% of Ingles Markets, shares are held by institutional investors. 30.3% of Ingles Markets, shares are held by company insiders. Comparatively, 8.5% of Smart shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Ingles Markets, pays an annual dividend of $0.66 per share and has a dividend yield of 2.2%. Smart does not pay a dividend. Ingles Markets, pays out 26.8% of its earnings in the form of a dividend.

Summary

Ingles Markets, beats Smart on 9 of the 15 factors compared between the two stocks.

Ingles Markets, Company Profile

Ingles Markets, Incorporated (Ingles) is a supermarket chain in the southeast United States. The Company’s segments include retail grocery and other. Its other segment consists of fluid dairy operations and shopping center rentals. As of September 24, 2016, the Company operated 201 supermarkets in Georgia, North Carolina, South Carolina, Tennessee, Virginia and Alabama. The Company locates its supermarkets primarily in suburban areas, small towns and rural communities. Ingles supermarkets offer customers a range of food products, including grocery, meat and dairy products, produce, frozen foods and other perishables and non-food products. Its non-food products include fuel centers, pharmacies, health and beauty care products and general merchandise. The Company focuses on selling products to its customers through the development of organic products, bakery departments and prepared foods, including delicatessen sections.

Smart Company Profile

Smart & Final Stores, Inc. is a food retailer. The Company is engaged in the business of selling fresh perishables and everyday grocery items, together with foodservice, packaging and janitorial products. The Company operates through two segments: Smart & Final, and Cash and Carry. The Smart & Final segment focuses on both household and business customers. Its Smart & Final stores offer various selections of fresh perishables and everyday grocery items, together with a focused selection of foodservice, packaging and janitorial products, under both national and private label brands. The Cash & Carry segment focuses primarily on restaurants, caterers and a range of other foodservice businesses. It operates non-membership warehouse-style grocery stores under the Smart & Final banner in California, Arizona, and Nevada. The Company also operates non-membership warehouse-style grocery stores in Washington, Oregon, California, Idaho, Utah, and Nevada under the Cash & Carry banner.

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