Reviewing Core-Mark (CORE) and SuperValu (SVU)

Core-Mark (NASDAQ: CORE) and SuperValu (NYSE:SVU) are both small-cap business services companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, dividends and profitability.

Analyst Ratings

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This is a summary of recent recommendations for Core-Mark and SuperValu, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Core-Mark 0 3 3 1 2.71
SuperValu 2 6 2 0 2.00

Core-Mark currently has a consensus price target of $26.20, indicating a potential upside of 24.29%. SuperValu has a consensus price target of $23.06, indicating a potential upside of 62.53%. Given SuperValu’s higher probable upside, analysts plainly believe SuperValu is more favorable than Core-Mark.

Risk and Volatility

Core-Mark has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500. Comparatively, SuperValu has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500.

Dividends

Core-Mark pays an annual dividend of $0.40 per share and has a dividend yield of 1.9%. SuperValu does not pay a dividend. Core-Mark pays out 40.0% of its earnings in the form of a dividend.

Insider and Institutional Ownership

97.8% of Core-Mark shares are held by institutional investors. Comparatively, 91.4% of SuperValu shares are held by institutional investors. 2.0% of Core-Mark shares are held by insiders. Comparatively, 1.7% of SuperValu shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Core-Mark and SuperValu’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Core-Mark 0.21% 8.84% 2.99%
SuperValu 4.17% 26.48% 2.57%

Valuation & Earnings

This table compares Core-Mark and SuperValu’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Core-Mark $15.69 billion 0.06 $33.50 million $1.00 21.08
SuperValu $12.48 billion 0.04 $650.00 million $2.03 6.99

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

Summary

Core-Mark beats SuperValu on 10 of the 17 factors compared between the two stocks.

Core-Mark Company Profile

Core-Mark Holding Company, Inc. markets fresh and broad-line supply solutions to the convenience retail industry. The company sells and distributes various food/non-food products, including cigarettes, fast food, candies, snacks, groceries, fresh products, dairy products, breads, beverages, other tobacco products, general merchandise and equipment, and health and beauty care products. Its customers include traditional convenience stores, such as national and super-regional convenience store operators, as well as independently owned convenience stores; and alternative outlets, which include grocery stores, drug stores, big box or supercenter stores, liquor stores, cigarette and tobacco shops, hotel gift shops, military exchanges, college and corporate campuses, casinos, hardware stores, airport concessions, and other specialty and small format stores that carry convenience products. The company offers its products to 45,000 customer locations through a network of distribution centers in the United States and Canada. Core-Mark Holding Company, Inc. was founded in 1888 and is headquartered in South San Francisco, California.

SuperValu Company Profile

SUPERVALU INC., together with its subsidiaries, operates as a grocery wholesaler and retailer in the United States. The company operates through two segments, Wholesale and Retail. The Wholesale segment engages in the wholesale distribution of various food and non-food products to independent retail customers, such as single and multiple grocery store operators, regional chains, and the military. This segment also provides various services, such as retail store support, advertising, couponing, e-commerce, network and data hosting solutions, and training and certification classes, as well as administrative back-office solutions. As of February 25, 2017, this segment operated approximately 1,902 stores with a network spanning 40 states. The Retail segment operates retail stores that provide groceries and various additional products, including general merchandise, home, health and beauty care, and pharmacy products. This segment operated 217 stores under the Cub Foods, Shoppers Food & Pharmacy, Shop 'n Save, Farm Fresh, and Hornbacher's banners, as well as 2 Rainbow stores. The company's stores offer a range of branded and private-label products comprising perishable and nonperishable grocery products. SUPERVALU INC. was founded in 1871 and is headquartered in Eden Prairie, Minnesota.

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