Whole Foods Market (NASDAQ: WFM) and SpartanNash (NASDAQ:SPTN) are both non-cyclical consumer goods & services companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.
Valuation and Earnings
This table compares Whole Foods Market and SpartanNash’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Whole Foods Market||N/A||N/A||N/A||$1.22||34.42|
|SpartanNash||$7.93 billion||0.12||$228.44 million||$1.74||14.59|
SpartanNash has higher revenue and earnings than Whole Foods Market. SpartanNash is trading at a lower price-to-earnings ratio than Whole Foods Market, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Whole Foods Market has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500. Comparatively, SpartanNash has a beta of 1.06, indicating that its stock price is 6% more volatile than the S&P 500.
This is a breakdown of current ratings and price targets for Whole Foods Market and SpartanNash, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Whole Foods Market||3||18||2||0||1.96|
Whole Foods Market currently has a consensus target price of $37.06, indicating a potential downside of 11.75%. SpartanNash has a consensus target price of $24.80, indicating a potential downside of 2.32%. Given SpartanNash’s higher probable upside, analysts plainly believe SpartanNash is more favorable than Whole Foods Market.
Institutional and Insider Ownership
79.2% of Whole Foods Market shares are held by institutional investors. Comparatively, 88.2% of SpartanNash shares are held by institutional investors. 1.3% of Whole Foods Market shares are held by company insiders. Comparatively, 3.0% of SpartanNash shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Whole Foods Market pays an annual dividend of $0.72 per share and has a dividend yield of 1.7%. SpartanNash pays an annual dividend of $0.66 per share and has a dividend yield of 2.6%. Whole Foods Market pays out 59.0% of its earnings in the form of a dividend. SpartanNash pays out 37.9% 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. SpartanNash is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Whole Foods Market and SpartanNash’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Whole Foods Market||2.85%||13.51%||7.02%|
SpartanNash beats Whole Foods Market on 8 of the 13 factors compared between the two stocks.
Whole Foods Market Company Profile
Whole Foods Market, Inc. is engaged in the business of natural and organic foods supermarket. The Company operates approximately 456 stores in the United States, Canada and the United Kingdom. Its stores have an average size of approximately 39,000 square feet, and are supported by its distribution centers, bake house facilities, commissary kitchens, seafood-processing facilities, a produce procurement center, and a specialty coffee and tea procurement and roasting operation, among others. It offers over 30,000 organic stock keeping units (SKUs), covering various areas of its store, including produce, packaged goods, bulk, frozen, dairy, meat, bakery, prepared foods, coffee, tea, beer, wine, cheese, nutritional supplements, vitamins, body care, pet foods and household goods. The Company’s brands include 365 Everyday Value, Allegro Coffee, Whole Foods Market, Whole Paws, and Engine 2 Plant-Strong. It also offers approximately 400 temporary exclusives.
SpartanNash Company Profile
SpartanNash Company is a multi-regional grocery distributor and grocery retailer. The Company’s core businesses include distributing grocery products to independent grocery retailers (independent retailers), select national retailers, its corporate owned retail stores, and the United States military commissaries. The Company operates through three segments: Food Distribution, Military and Retail. The Food Distribution segment provides a range of nationally branded and private brand grocery products and perishable food products to independent retailers, food service distributors and its corporate owned retail stores. The Military segment contracts with manufacturers to distribute a range of grocery products primarily to military commissaries and exchanges located in the United States, the District of Columbia, Europe, Cuba, Puerto Rico, Bahrain and Egypt. As of December 31, 2016, the Retail segment operated 157 corporate owned retail stores in the Midwest and Great Lakes regions.
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