Companhia Brasileira de Distribuição (NYSE:CBD) and The Kroger (NYSE:KR) are both retail/wholesale companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, valuation, earnings, risk and dividends.
Dividends
Companhia Brasileira de Distribuição pays an annual dividend of $0.09 per share and has a dividend yield of 1.2%. The Kroger pays an annual dividend of $0.72 per share and has a dividend yield of 1.9%. Companhia Brasileira de Distribuição pays out 11.4% of its earnings in the form of a dividend. The Kroger pays out 20.7% 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. The Kroger has increased its dividend for 14 consecutive years. The Kroger is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk and Volatility
Companhia Brasileira de Distribuição has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, The Kroger has a beta of 0.36, suggesting that its share price is 64% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of current ratings and price targets for Companhia Brasileira de Distribuição and The Kroger, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Companhia Brasileira de Distribuição | 0 | 2 | 1 | 0 | 2.33 |
| The Kroger | 4 | 12 | 2 | 0 | 1.89 |
The Kroger has a consensus price target of $35.3333, indicating a potential downside of 8.82%. Given The Kroger's higher possible upside, analysts clearly believe The Kroger is more favorable than Companhia Brasileira de Distribuição.
Valuation & Earnings
This table compares Companhia Brasileira de Distribuição and The Kroger's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Companhia Brasileira de Distribuição | $9.95 billion | 0.20 | $422.73 million | $0.79 | 9.41 |
| The Kroger | $132.50 billion | 0.22 | $2.59 billion | $3.47 | 11.17 |
The Kroger has higher revenue and earnings than Companhia Brasileira de Distribuição. Companhia Brasileira de Distribuição is trading at a lower price-to-earnings ratio than The Kroger, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
82.7% of The Kroger shares are owned by institutional investors. 0.0% of Companhia Brasileira de Distribuição shares are owned by insiders. Comparatively, 1.4% of The Kroger shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Profitability
This table compares Companhia Brasileira de Distribuição and The Kroger's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Companhia Brasileira de Distribuição | 3.51% | 12.28% | 3.52% |
| The Kroger | 1.95% | 28.31% | 5.72% |
Summary
The Kroger beats Companhia Brasileira de Distribuição on 13 of the 17 factors compared between the two stocks.
