Head to Head Survey: Ingles (IMKTA) and Kroger (KR)

Ingles (NASDAQ: IMKTA) and Kroger (NYSE:KR) are both retail/wholesale companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, valuation, risk, analyst recommendations, earnings, dividends and institutional ownership.

Earnings & Valuation

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This table compares Ingles and Kroger’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ingles $4.00 billion 0.17 $53.87 million $2.66 12.71
Kroger $122.66 billion 0.17 $1.91 billion $2.04 12.02

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

Insider & Institutional Ownership

60.2% of Ingles shares are owned by institutional investors. Comparatively, 75.8% of Kroger shares are owned by institutional investors. 29.5% of Ingles shares are owned by company insiders. Comparatively, 0.9% of Kroger shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Ingles pays an annual dividend of $0.66 per share and has a dividend yield of 2.0%. Kroger pays an annual dividend of $0.50 per share and has a dividend yield of 2.0%. Ingles pays out 24.8% of its earnings in the form of a dividend. Kroger pays out 24.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Kroger has increased its dividend for 9 consecutive years. Kroger is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current recommendations for Ingles and Kroger, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ingles 0 0 0 0 N/A
Kroger 0 14 11 0 2.44

Kroger has a consensus price target of $27.05, suggesting a potential upside of 10.26%. Given Kroger’s higher probable upside, analysts clearly believe Kroger is more favorable than Ingles.

Volatility and Risk

Ingles has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500. Comparatively, Kroger has a beta of 1.04, suggesting that its share price is 4% more volatile than the S&P 500.

Profitability

This table compares Ingles and Kroger’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ingles 2.11% 16.66% 4.93%
Kroger 1.55% 29.27% 5.07%

Summary

Kroger beats Ingles on 11 of the 16 factors compared between the two stocks.

About Ingles

Ingles Markets, Incorporated operates a chain of supermarkets in the southeast United States. Its supermarkets offer various food products, including grocery, meat and dairy products, produce, frozen foods, and other perishables; and non-food products, such as fuel centers, pharmacies, health and beauty care products, and general merchandise, as well as private label items. The company also provides home meal replacement items, delicatessens, bakeries, floral departments, and greeting cards, as well as organic, beverage, and health-related items. As of September 30, 2017, it operated 190 supermarkets under the Ingles name; and 9 supermarkets under the Sav-Mor name in western North Carolina, western South Carolina, northern Georgia, eastern Tennessee, southwestern Virginia and northeastern Alabama, as well as 103 pharmacies and 97 fuel centers. In addition, it is involved in the fluid dairy operation and shopping center rental businesses. Ingles Markets, Incorporated was founded in 1963 and is headquartered in Black Mountain, North Carolina.

About Kroger

The Kroger Co., together with its subsidiaries, operates as a retailer in the United States. It also manufactures and processes food for sale in its supermarkets. The company operates retail food and drug stores, multi-department stores, jewelry stores, and convenience stores. Its combination food and drug stores offer natural food and organic sections, pharmacies, general merchandise, pet centers, fresh seafood, and organic produce; multi-department stores provide general merchandise items, such as apparel, home fashion and furnishings, outdoor living, electronics, automotive products, toys, and fine jewelry; and price impact warehouse stores offer grocery, and health and beauty care items, as well as meat, dairy, baked goods, and fresh produce items. The company's marketplace stores comprise full-service grocery, pharmacy, health and beauty departments, and perishable goods, as well as general merchandise, including apparel, home goods, and toys. It operates under the banner brands, such as Kroger, Ralphs, Fred Meyer, King Soopers, etc., as well as Simple Truth and Simple Truth Organic brands. As of October 26, 2017, the company operated 2,793 retail food stores, including 1,472 supermarket fuel centers; 783 convenience stores; 2,258 pharmacies; 222 retail health clinics; and 307 fine jewelry stores, as well as an online retail store. The Kroger Co. was founded in 1883 and is headquartered in Cincinnati, Ohio.

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