Kroger (KR) vs. Safeway (SWY) Head to Head Contrast

Safeway (NYSE: SWY) and Kroger (NYSE:KR) are both mid-cap non-cyclical consumer goods & services companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, risk, dividends, valuation, earnings, analyst recommendations and profitability.

Analyst Ratings

This is a summary of recent recommendations for Safeway and Kroger, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Safeway 0 0 0 0 N/A
Kroger 0 13 11 0 2.46

Kroger has a consensus target price of $30.17, suggesting a potential upside of 7.80%. Given Kroger’s higher probable upside, analysts clearly believe Kroger is more favorable than Safeway.

Institutional and Insider Ownership

79.6% of Kroger shares are held by institutional investors. 0.9% of Kroger shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Safeway and Kroger’s gross revenue, earnings per share 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
Kroger $115.34 billion 0.21 $1.98 billion $1.68 16.66

Kroger has higher revenue and earnings than Safeway. Kroger is trading at a lower price-to-earnings ratio than Safeway, 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 1.8%. Safeway does not pay a dividend. Kroger pays out 29.8% of its earnings in the form of a dividend. Safeway has raised its dividend for 9 consecutive years and Kroger has raised its dividend for 13 consecutive years.

Risk & Volatility

Safeway has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500. Comparatively, Kroger has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500.

Profitability

This table compares Safeway and Kroger’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%
Kroger 1.31% 28.60% 4.94%

Summary

Kroger beats Safeway on 11 of the 14 factors compared between the two stocks.

About Safeway

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.

About Kroger

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.

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