Companhia Brasileira de Distribuição (NYSE:CBD) and The Kroger (NYSE:KR) are both retail/wholesale companies, but which is the better stock? We will compare the two companies based on the strength of their risk, dividends, institutional ownership, earnings, analyst recommendations, profitability and valuation.
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 | 1.14% | 27.82% | 5.55% |
Insider & Institutional Ownership
82.3% of The Kroger shares are held by institutional investors. 0.0% of Companhia Brasileira de Distribuição shares are held by insiders. Comparatively, 1.4% of The Kroger shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Analyst Ratings
This is a summary of current ratings for Companhia Brasileira de Distribuição and The Kroger, as reported 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 | 11 | 2 | 0 | 1.88 |
The Kroger has a consensus price target of $36.1765, indicating a potential downside of 11.11%. Given The Kroger's higher probable upside, analysts plainly believe The Kroger is more favorable than Companhia Brasileira de Distribuição.
Volatility and Risk
Companhia Brasileira de Distribuição has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500. Comparatively, The Kroger has a beta of 0.36, indicating that its stock price is 64% less volatile than the S&P 500.
Dividends
Companhia Brasileira de Distribuição pays an annual dividend of $0.09 per share and has a dividend yield of 1.5%. The Kroger pays an annual dividend of $0.72 per share and has a dividend yield of 1.8%. 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.
Valuation and Earnings
This table compares Companhia Brasileira de Distribuição and The Kroger's top-line 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 | 0.16 | $422.73 million | $0.79 | 7.66 |
| The Kroger | $132.50 billion | 0.23 | $2.59 billion | $3.47 | 11.73 |
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.
Summary
The Kroger beats Companhia Brasileira de Distribuição on 13 of the 17 factors compared between the two stocks.
