Contrasting Winn-Dixie Stores (WINN) & Wal-Mart Stores (WMT)

Winn-Dixie Stores (NASDAQ: WINN) and Wal-Mart Stores (NYSE:WMT) are both supermarkets & convenience stores companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, risk, earnings, valuation and institutional ownership.

Dividends

Wal-Mart Stores pays an annual dividend of $2.04 per share and has a dividend yield of 2.1%. Winn-Dixie Stores does not pay a dividend. Wal-Mart Stores pays out 54.3% of its earnings in the form of a dividend. Winn-Dixie Stores has raised its dividend for 42 consecutive years.

Earnings & Valuation

This table compares Winn-Dixie Stores and Wal-Mart Stores’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Winn-Dixie Stores N/A N/A N/A ($0.24) N/A
Wal-Mart Stores $485.87 billion 0.59 $13.64 billion $3.76 25.83

Wal-Mart Stores has higher revenue and earnings than Winn-Dixie Stores. Winn-Dixie Stores is trading at a lower price-to-earnings ratio than Wal-Mart Stores, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

30.7% of Wal-Mart Stores shares are owned by institutional investors. 51.4% of Wal-Mart Stores 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.

Profitability

This table compares Winn-Dixie Stores and Wal-Mart Stores’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Winn-Dixie Stores N/A N/A N/A
Wal-Mart Stores 2.31% 16.92% 6.57%

Analyst Ratings

This is a summary of recent ratings for Winn-Dixie Stores and Wal-Mart Stores, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Winn-Dixie Stores 0 0 0 0 N/A
Wal-Mart Stores 1 19 13 0 2.36

Wal-Mart Stores has a consensus price target of $92.15, suggesting a potential downside of 5.12%.

Summary

Wal-Mart Stores beats Winn-Dixie Stores on 9 of the 11 factors compared between the two stocks.

About Winn-Dixie Stores

Winn-Dixie Stores, Inc. operates as a food retailer in five states in the southeastern United States. The Company operated 484 retail stores, with four fuel centers and 75 liquor stores. In support of its stores, the Company operated six distribution centers. All of the Company’s stores offer grocery, dairy, frozen food, meat, seafood, produce, deli, bakery, floral, health and beauty, and other general merchandise items. Certain stores offer pharmacies, distilled spirits and fuel. The Company offers national brands, as well as many of its own private-label products. These products are delivered from its distribution centers or directly to stores from manufacturers and wholesalers. During the fiscal year ended June 29, 2011 (fiscal 2011), the Company closed 30 non-remodeled, underperforming stores.

About Wal-Mart Stores

Wal-Mart Stores, Inc. is engaged in the operation of retail, wholesale and other units in various formats around the world. The Company operates through three segments: Walmart U.S., Walmart International and Sam’s Club. The Walmart U.S. segment includes its mass merchant concept in the United States operating under the Walmart or Wal-Mart brands, as well as digital retail. The Walmart International segment consists of the Company’s operations outside of the United States, including various retail Websites. The Walmart International segment includes various formats divided into three categories: retail, wholesale and other. These categories consist of various formats, including supercenters, supermarkets, and warehouse clubs, such as Sam’s Clubs, cash and carry, home improvement, specialty electronics, apparel stores, drug stores and convenience stores, as well as digital retail. The Sam’s Club segment includes the warehouse membership clubs in the United States, and samsclub.com.

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