Head-To-Head Comparison: Safeway (SWY) & SuperValu (SVU)

Safeway (NYSE: SWY) and SuperValu (NYSE:SVU) are both food retail & distribution – nec companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, earnings, valuation, profitability, risk and dividends.

Profitability

This table compares Safeway and SuperValu’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Safeway -0.26% -1.66% -0.69%
SuperValu 4.08% 41.33% 2.32%

Valuation & Earnings

This table compares Safeway and SuperValu’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Safeway N/A N/A N/A $0.12 292.50
SuperValu $12.48 billion 0.07 $650.00 million ($0.56) -38.89

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

Insider and Institutional Ownership

80.6% of SuperValu shares are held by institutional investors. 1.7% of SuperValu shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Safeway has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500. Comparatively, SuperValu has a beta of 2.29, indicating that its share price is 129% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Safeway and SuperValu, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Safeway 0 0 0 0 N/A
SuperValu 1 6 2 0 2.11

SuperValu has a consensus price target of $26.29, suggesting a potential upside of 20.69%. Given SuperValu’s higher possible upside, analysts plainly believe SuperValu is more favorable than Safeway.

Summary

SuperValu beats Safeway on 9 of the 11 factors compared between the two stocks.

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.

SuperValu Company Profile

Supervalu Inc. is a wholesale distributor to independent retail customers across the United States. The Company’s segments include Wholesale and Retail. The Company offers a range of advertised brand name and private-label products, including grocery (both perishable and nonperishable), general merchandise and home, health and beauty care, and pharmacy, which are sold through Company-operated and licensed Retail stores to shoppers and through its Wholesale segment to independent retail customers. The Company’s Wholesale segment provides wholesale distribution of products to independent retail customers. Wholesale is organized and operated through two geographic regions: East and West. As of February 27, 2016, the Company conducted its Retail operations through a total of 200 stores primarily organized under five regionally-based retail banners of Cub Foods, Shoppers Food & Pharmacy, Shop ‘n Save, Farm Fresh and Hornbacher’s, as well as two Rainbow and two County Market stores.

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