Head-To-Head Analysis: Sainsbury’s (JSAIY) & DavidsTea (DTEA)

Sainsbury’s (OTCMKTS: JSAIY) and DavidsTea (NASDAQ:DTEA) are both retail/wholesale companies, but which is the superior stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, valuation and earnings.

Earnings & Valuation

This table compares Sainsbury’s and DavidsTea’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sainsbury’s $37.73 billion 0.24 $492.85 million $1.08 15.23
DavidsTea $173.64 million 0.54 -$22.09 million N/A N/A

Sainsbury’s has higher revenue and earnings than DavidsTea.

Dividends

Sainsbury’s pays an annual dividend of $0.47 per share and has a dividend yield of 2.9%. DavidsTea does not pay a dividend. Sainsbury’s pays out 43.5% of its earnings in the form of a dividend.

Institutional and Insider Ownership

0.3% of Sainsbury’s shares are held by institutional investors. Comparatively, 12.0% of DavidsTea shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Sainsbury’s has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500. Comparatively, DavidsTea has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500.

Profitability

This table compares Sainsbury’s and DavidsTea’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sainsbury’s N/A N/A N/A
DavidsTea -12.89% 0.07% 0.06%

Analyst Ratings

This is a breakdown of current ratings and target prices for Sainsbury’s and DavidsTea, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sainsbury’s 0 2 2 0 2.50
DavidsTea 0 1 0 0 2.00

DavidsTea has a consensus price target of $4.00, indicating a potential upside of 9.59%. Given DavidsTea’s higher possible upside, analysts plainly believe DavidsTea is more favorable than Sainsbury’s.

Summary

Sainsbury’s beats DavidsTea on 7 of the 13 factors compared between the two stocks.

About Sainsbury’s

J Sainsbury plc, together with its subsidiaries, engages in the food, general merchandise and clothing retailing, and financial services activities in the United Kingdom. It operates through four segments: Retail ? Food; Retail ? General Merchandise & Clothing; Financial Services; and Property Investment. The company operates various store formats, including convenience stores and supermarkets, as well as offers organic produce under the Food to Go and FreeFrom names. It is also involved in an online grocery and general merchandise operations; and provides home, clothing, technology, leisure, toy, and electrical products, as well as groceries and loyalty programs, and energy solutions. As of March 11, 2017, the company operated 605 supermarkets and 809 convenience stores, as well as 59 Argos Digital stores, 11 Habitat stores, and 207 Digital Collection points. In addition, the company invests in and develops real estate properties; and offers financial services, such as loans portfolio comprising credit cards and storecards, personal loans, insurance, and travel money. J Sainsbury plc was founded in 1869 and is headquartered in London, the United Kingdom.

About DavidsTea

DAVIDsTEA Inc. is engaged in the retail and online sale of tea, tea accessories, and food and beverages in Canada and in the United States. The Company’s segments include Canada and the U.S. The Company is a branded retailer of specialty tea, offering approximately 150 loose-leaf teas, pre-packaged teas, tea sachets and tea-related gifts, accessories, and food and beverages primarily through approximately 190 DAVIDsTEA stores, which are operated by the Company, and its Website, davidstea.com. Additionally, the Company offers on-the-go tea beverages in its retail stores. The Company’s tea accessories include tea mugs, travel mugs, teacup sets, teapots, tea makers, kettles, infusers, filters, frothers, tins and spoons. The Company offers beverages range from the standard hot or iced tea to its Tea Lattes. The Company’s different flavors of loose-leaf tea span eight tea categories: white, green, oolong, black, pu’erh, mate, rooibos and herbal tea.

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