SuperValu (NYSE: SVU) and Sprouts Farmers Market (NASDAQ:SFM) are both consumer staples companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, analyst recommendations, profitability, dividends, institutional ownership and risk.

Profitability

This table compares SuperValu and Sprouts Farmers Market’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%
Sprouts Farmers Market 2.96% 18.79% 8.65%

Analyst Ratings

This is a summary of current ratings for SuperValu and Sprouts Farmers Market, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SuperValu 0 4 2 0 2.33
Sprouts Farmers Market 1 10 11 0 2.45

SuperValu presently has a consensus price target of $32.90, indicating a potential upside of 43.54%. Sprouts Farmers Market has a consensus price target of $25.59, indicating a potential upside of 6.00%. Given SuperValu’s higher probable upside, equities research analysts plainly believe SuperValu is more favorable than Sprouts Farmers Market.

Earnings & Valuation

This table compares SuperValu and Sprouts Farmers Market’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
SuperValu $12.72 billion 0.07 $461.00 million $16.03 1.43
Sprouts Farmers Market $4.34 billion 0.75 $295.71 million $0.90 26.82

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

Risk and Volatility

SuperValu has a beta of 2.06, meaning that its share price is 106% more volatile than the S&P 500. Comparatively, Sprouts Farmers Market has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500.

Insider and Institutional Ownership

80.5% of SuperValu shares are owned by institutional investors. Comparatively, 86.9% of Sprouts Farmers Market shares are owned by institutional investors. 1.7% of SuperValu shares are owned by company insiders. Comparatively, 2.6% of Sprouts Farmers Market shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

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 Sprouts Farmers Market

Sprouts Farmers Market, Inc. is a food retailer. The Company operates as a grocery store that offers fresh, natural and organic food that includes fresh produce, bulk foods, vitamins and supplements, packaged groceries, meat and seafood, deli, baked goods, dairy products, frozen foods, body care and natural household items catering to consumers’ interest in health and wellness. As of February 23, 2017, the Company operated 256 stores in 14 states. The Company categorizes the varieties of products it sells as perishable and non-perishable. The perishable product categories include produce, meat, seafood, deli and bakery. Its non-perishable product categories include grocery, vitamins and supplements, bulk items, dairy and dairy alternatives, frozen foods, beer and wine, and natural health and body care.

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