Companhia Brasileira de Distribuicao (CBD) & Krispy Kreme Doughnuts (KKD) Critical Survey

Companhia Brasileira de Distribuicao (NYSE: CBD) and Krispy Kreme Doughnuts (NYSE:KKD) are both retail/wholesale companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, earnings, risk, valuation, profitability, institutional ownership and dividends.

Risk and Volatility

Companhia Brasileira de Distribuicao has a beta of 1.84, suggesting that its share price is 84% more volatile than the S&P 500. Comparatively, Krispy Kreme Doughnuts has a beta of 1.52, suggesting that its share price is 52% more volatile than the S&P 500.

Valuation & Earnings

This table compares Companhia Brasileira de Distribuicao and Krispy Kreme Doughnuts’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Companhia Brasileira de Distribuicao $11.95 billion 0.53 -$138.18 million $0.31 76.26
Krispy Kreme Doughnuts N/A N/A N/A $0.47 44.68

Krispy Kreme Doughnuts has lower revenue, but higher earnings than Companhia Brasileira de Distribuicao. Krispy Kreme Doughnuts is trading at a lower price-to-earnings ratio than Companhia Brasileira de Distribuicao, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

3.3% of Companhia Brasileira de Distribuicao shares are owned by institutional investors. 0.0% of Companhia Brasileira de Distribuicao shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations and price targets for Companhia Brasileira de Distribuicao and Krispy Kreme Doughnuts, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Companhia Brasileira de Distribuicao 0 0 2 0 3.00
Krispy Kreme Doughnuts 0 0 0 0 N/A

Dividends

Companhia Brasileira de Distribuicao pays an annual dividend of $0.32 per share and has a dividend yield of 1.4%. Krispy Kreme Doughnuts does not pay a dividend. Companhia Brasileira de Distribuicao pays out 103.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Companhia Brasileira de Distribuicao and Krispy Kreme Doughnuts’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Companhia Brasileira de Distribuicao 0.64% 6.47% 1.97%
Krispy Kreme Doughnuts 6.90% 15.58% 11.41%

Summary

Companhia Brasileira de Distribuicao beats Krispy Kreme Doughnuts on 7 of the 12 factors compared between the two stocks.

Companhia Brasileira de Distribuicao Company Profile

Companhia Brasileira de Distribuicao, directly or through its subsidiaries, is engaged in the retail of food, clothing, home appliances, electronics and other items through its chain of hypermarkets, supermarkets, specialized stores and department stores principally under the trade names Pao de Acucar, Minuto Pao de Acucar, Extra Hiper, Extra Super, Minimercado Extra, Assai an the neighborhood shopping mall brand Conviva. The Company’s segments include Retail, and Cash and carry segment. The Company’s Retail segment includes the banners Pao de Acucar, Minuto Pao de Acucar, Extra Hiper, Extra Supermercado, Minimercado Extra, Posto Extra, Drogaria Extra and GPA Malls & Properties. Its Cash & Carry segment includes the brand Assai. The Company is engaged in operations of retail stores located in approximately 20 states and the Federal District of Brazil.

Krispy Kreme Doughnuts Company Profile

Krispy Kreme Doughnuts, Inc. is a retailer and wholesaler of doughnuts, complementary beverages, and treats and packaged sweets. The Company’s principal business includes owning and franchising Krispy Kreme stores, at which a range of doughnuts, including the Company’s Original Glazed doughnut, together with complementary products, including an array of coffees and other beverages. The Company operates through four business segments: Company Stores, Domestic Franchise, International Franchise and KK Supply Chain. The Company Stores segment includes the doughnut shops operated by the Company. The Domestic Franchise segment consists of the Company’s domestic store franchise operations and the licensing of Krispy Kreme products domestically. The International Franchise segment consists of the Company’s international store franchise operations. The KK Supply Chain segment produces doughnut mixes and manufactures doughnut-making equipment.

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