Analyzing Kroger (KR) and Weis Markets (WMK)

Kroger (NYSE: KR) and Weis Markets (NYSE:WMK) are both retail/wholesale companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, profitability, earnings, analyst recommendations and dividends.

Profitability

This table compares Kroger and Weis Markets’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kroger 1.31% 28.60% 4.94%
Weis Markets 2.16% 8.13% 5.39%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Kroger and Weis Markets, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kroger 0 14 9 0 2.39
Weis Markets 0 0 0 0 N/A

Kroger presently has a consensus price target of $29.52, suggesting a potential upside of 12.59%. Given Kroger’s higher probable upside, research analysts plainly believe Kroger is more favorable than Weis Markets.

Volatility & Risk

Kroger has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500. Comparatively, Weis Markets has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500.

Valuation & Earnings

This table compares Kroger and Weis Markets’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kroger $115.34 billion 0.20 $1.98 billion $1.68 15.61
Weis Markets $3.14 billion 0.36 $87.16 million $2.81 14.83

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

Dividends

Kroger pays an annual dividend of $0.50 per share and has a dividend yield of 1.9%. Weis Markets pays an annual dividend of $1.20 per share and has a dividend yield of 2.9%. Kroger pays out 29.8% of its earnings in the form of a dividend. Weis Markets pays out 42.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Kroger has raised its dividend for 8 consecutive years.

Insider & Institutional Ownership

79.1% of Kroger shares are owned by institutional investors. Comparatively, 31.9% of Weis Markets shares are owned by institutional investors. 0.9% of Kroger shares are owned by insiders. Comparatively, 26.9% of Weis Markets shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Kroger beats Weis Markets on 9 of the 16 factors compared between the two stocks.

Kroger Company Profile

The Kroger Co. (Kroger) manufactures and processes food for sale in its supermarkets. The Company operates supermarkets, multi-department stores, jewelry stores and convenience stores throughout the United States. As of January 28, 2017, it had operated approximately 4,000 owned or leased supermarkets, convenience stores, fine jewelry stores, distribution warehouses and food production plants through divisions, subsidiaries or affiliates. These facilities are located throughout the United States. As of January 28, 2017, Kroger operated, either directly or through its subsidiaries, 2,796 supermarkets under a range of local banner names, of which 2,255 had pharmacies and 1,445 had fuel centers. As of January 28, 2017, the Company offered ClickList and Harris Teeter ExpressLane, personalized, order online, pick up at the store services at 637 of its supermarkets. P$$T, Check This Out and Heritage Farm are the three brands. Its other brands include Simple Truth and Simple Truth Organic.

Weis Markets Company Profile

Weis Markets, Inc. is engaged principally in the retail sale of food in Pennsylvania and surrounding states. The Company’s retail food stores sell groceries, dairy products, frozen foods, meats, seafood, fresh produce, floral, pharmacy services, deli products, prepared foods, bakery products, beer and wine, fuel and general merchandise items, such as health and beauty care and household products. As of December 31, 2016, it had owned and operated approximately 204 retail food stores. The majority of the Company’s stores are concentrated in central and northeast Pennsylvania, central Maryland, suburban Washington, District of Columbia and Baltimore regions and New York’s Southern Tier. As of December 31, 2016, it had operated four stores in Delaware, 50 stores in Maryland, five stores in New Jersey, nine stores in New York, 121 stores in Pennsylvania, 13 stores in Virginia and two stores in West Virginia, for a total of 204 retail food stores operating under the Weis Markets name.

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