Comparing Grocery Outlet (NYSE:GO) and Ingles Markets (NYSE:IMKTA)

Grocery Outlet (NYSE:GO) and Ingles Markets (NASDAQ:IMKTA) are both consumer defensive companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, profitability, institutional ownership, valuation and earnings.

Dividends

Ingles Markets pays an annual dividend of $0.66 per share and has a dividend yield of 1.7%. Grocery Outlet does not pay a dividend. Ingles Markets pays out 13.7% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Grocery Outlet and Ingles Markets’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Grocery Outlet N/A N/A N/A N/A N/A
Ingles Markets $4.09 billion 0.20 $97.36 million $4.81 8.20

Ingles Markets has higher revenue and earnings than Grocery Outlet.

Analyst Recommendations

This is a breakdown of current recommendations for Grocery Outlet and Ingles Markets, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Grocery Outlet 0 5 4 0 2.44
Ingles Markets 0 0 0 0 N/A

Grocery Outlet presently has a consensus price target of $40.00, suggesting a potential upside of 6.89%. Given Grocery Outlet’s higher probable upside, research analysts clearly believe Grocery Outlet is more favorable than Ingles Markets.

Insider & Institutional Ownership

65.0% of Ingles Markets shares are held by institutional investors. 29.5% of Ingles Markets shares are held 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 Grocery Outlet and Ingles Markets’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Grocery Outlet N/A N/A N/A
Ingles Markets 1.89% 12.75% 4.30%

Summary

Ingles Markets beats Grocery Outlet on 7 of the 10 factors compared between the two stocks.

About Grocery Outlet

Grocery Outlet Holding Corp. owns and operates a chain of grocery stores in the United States. The company offers products in various categories, such as grocery, dairy and deli, produce, refrigerated and frozen, floral, beer and wine, general merchandise, and health and beauty care, as well as fresh meat and seafood; and natural, organic, specialty, and healthy products. As of December 29, 2018, it had 316 stores, which included 308 independent operated stores, as well as 8 company operated stores in 5 western states and in Pennsylvania. The company was founded in 1946 and is headquartered in Emeryville, California.

About Ingles Markets

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, 2018, it operated 190 supermarkets under the Ingles name; and 10 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 108 pharmacies and 102 fuel stations. 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.

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