Whole Foods Market (NASDAQ: WFM) and Smart (NYSE:SFS) are both retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, dividends, risk, profitabiliy, institutional ownership and earnings.

Profitability

This table compares Whole Foods Market and Smart’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Whole Foods Market 2.54% 13.72% 7.02%
Smart 0.23% 4.86% 1.42%

Earnings and Valuation

This table compares Whole Foods Market and Smart’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Whole Foods Market $15.86 billion 0.87 $1.33 billion $1.26 34.08
Smart $4.40 billion 0.14 $132.37 million $0.13 66.15

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

Dividends

Whole Foods Market pays an annual dividend of $0.56 per share and has a dividend yield of 1.3%. Smart does not pay a dividend. Whole Foods Market pays out 44.4% of its earnings in the form of a dividend.

Risk & Volatility

Whole Foods Market has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500. Comparatively, Smart has a beta of 0.28, meaning that its stock price is 72% less volatile than the S&P 500.

Institutional & Insider Ownership

91.4% of Whole Foods Market shares are held by institutional investors. 1.3% of Whole Foods Market shares are held by company insiders. Comparatively, 8.5% of Smart shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Whole Foods Market and Smart, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Whole Foods Market 3 16 7 0 2.15
Smart 1 5 5 0 2.36

Whole Foods Market currently has a consensus price target of $36.75, suggesting a potential downside of 14.43%. Smart has a consensus price target of $20.50, suggesting a potential upside of 138.37%. Given Smart’s stronger consensus rating and higher possible upside, analysts plainly believe Smart is more favorable than Whole Foods Market.

Summary

Whole Foods Market beats Smart on 12 of the 16 factors compared between the two stocks.

About Whole Foods Market

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.

About Smart

Smart & Final Stores, Inc. is a food retailer. The Company is engaged in the business of selling fresh perishables and everyday grocery items, together with foodservice, packaging and janitorial products. The Company operates through two segments: Smart & Final, and Cash and Carry. The Smart & Final segment focuses on both household and business customers. Its Smart & Final stores offer various selections of fresh perishables and everyday grocery items, together with a focused selection of foodservice, packaging and janitorial products, under both national and private label brands. The Cash & Carry segment focuses primarily on restaurants, caterers and a range of other foodservice businesses. It operates non-membership warehouse-style grocery stores under the Smart & Final banner in California, Arizona, and Nevada. The Company also operates non-membership warehouse-style grocery stores in Washington, Oregon, California, Idaho, Utah, and Nevada under the Cash & Carry banner.

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