SuperValu (NYSE: SVU) and Diplomat Pharmacy (NYSE:DPLO) are both consumer staples companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitabiliy, analyst recommendations, valuation and dividends.

Profitability

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

Net Margins Return on Equity Return on Assets
SuperValu 4.46% 220.54% 2.55%
Diplomat Pharmacy 0.38% 7.91% 4.35%

Analyst Recommendations

This is a summary of current recommendations and price targets for SuperValu and Diplomat Pharmacy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SuperValu 0 4 2 0 2.33
Diplomat Pharmacy 1 8 2 0 2.09

SuperValu currently has a consensus price target of $32.90, indicating a potential upside of 34.07%. Diplomat Pharmacy has a consensus price target of $17.89, indicating a potential upside of 20.73%. Given SuperValu’s stronger consensus rating and higher probable upside, analysts plainly believe SuperValu is more favorable than Diplomat Pharmacy.

Earnings and Valuation

This table compares SuperValu and Diplomat Pharmacy’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
SuperValu N/A N/A N/A $16.03 1.53
Diplomat Pharmacy $4.49 billion 0.22 $75.88 million $0.25 59.28

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

Institutional & Insider Ownership

80.5% of SuperValu shares are held by institutional investors. Comparatively, 72.0% of Diplomat Pharmacy shares are held by institutional investors. 1.7% of SuperValu shares are held by company insiders. Comparatively, 35.4% of Diplomat Pharmacy shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility and Risk

SuperValu has a beta of 2.06, meaning that its stock price is 106% more volatile than the S&P 500. Comparatively, Diplomat Pharmacy has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500.

Summary

SuperValu beats Diplomat Pharmacy on 7 of the 10 factors compared between the two stocks.

About SuperValu

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.

About Diplomat Pharmacy

Diplomat Pharmacy, Inc. (Diplomat) operates a specialty pharmacy business, which stocks, dispenses and distributes prescriptions for various biotechnology and specialty pharmaceutical manufacturers. The Company operates through specialty pharmacy services segment. The Company’s primary focus is on medication management programs for individuals with chronic diseases, including oncology, immunology, hepatitis, multiple sclerosis, specialty infusion therapy, and various other serious and/or long-term conditions. The Company provides specialty pharmacy support services to a national network of retailers and independent pharmacy groups, hospitals and health systems. The Company offers various services, such as specialty drug dispensing, retail specialty services, hospital and health system services, and hub services. The Company’s patient care system is used to coordinate and track patient adherence and safety.

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