Kroger Company (The) (KR) versus Delhaize Group SA (DEG) Critical Contrast

Kroger Company (The) (NYSE: KR) and Delhaize Group SA (NYSE:DEG) are both retail/wholesale companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, dividends, earnings, valuation, institutional ownership and risk.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Kroger Company (The) and Delhaize Group SA, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kroger Company (The) 1 15 9 0 2.32
Delhaize Group SA 0 0 1 0 3.00

Kroger Company (The) currently has a consensus price target of $30.38, indicating a potential upside of 32.90%. Given Kroger Company (The)’s higher possible upside, equities analysts plainly believe Kroger Company (The) is more favorable than Delhaize Group SA.

Risk and Volatility

Kroger Company (The) has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500. Comparatively, Delhaize Group SA has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500.

Institutional and Insider Ownership

77.3% of Kroger Company (The) shares are owned by institutional investors. 0.9% of Kroger Company (The) shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Kroger Company (The) and Delhaize Group SA’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Kroger Company (The) $117.02 billion 0.18 $5.51 billion $1.66 13.77
Delhaize Group SA N/A N/A N/A $1.19 23.62

Kroger Company (The) has higher revenue and earnings than Delhaize Group SA. Kroger Company (The) is trading at a lower price-to-earnings ratio than Delhaize Group SA, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Kroger Company (The) and Delhaize Group SA’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kroger Company (The) 1.35% 29.10% 5.29%
Delhaize Group SA 1.77% 7.11% 3.43%

Dividends

Kroger Company (The) pays an annual dividend of $0.50 per share and has a dividend yield of 2.2%. Delhaize Group SA pays an annual dividend of $0.35 per share and has a dividend yield of 1.2%. Kroger Company (The) pays out 30.1% of its earnings in the form of a dividend. Delhaize Group SA pays out 29.4% 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 Company (The) has raised its dividend for 8 consecutive years. Kroger Company (The) is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Kroger Company (The) beats Delhaize Group SA on 10 of the 14 factors compared between the two stocks.

Kroger Company (The) Company Profile

The Kroger Co. (Kroger) manufactures and processes food for sale in its supermarkets. The Company operates supermarkets, multi-department stores, jewelry stores and convenience stores throughout the United States. As of January 28, 2017, it had operated approximately 4,000 owned or leased supermarkets, convenience stores, fine jewelry stores, distribution warehouses and food production plants through divisions, subsidiaries or affiliates. These facilities are located throughout the United States. As of January 28, 2017, Kroger operated, either directly or through its subsidiaries, 2,796 supermarkets under a range of local banner names, of which 2,255 had pharmacies and 1,445 had fuel centers. As of January 28, 2017, the Company offered ClickList and Harris Teeter ExpressLane, personalized, order online, pick up at the store services at 637 of its supermarkets. P$$T, Check This Out and Heritage Farm are the three brands. Its other brands include Simple Truth and Simple Truth Organic.

Delhaize Group SA Company Profile

Delhaize le Lion de Leeuw BV (Belgium Branch), formerly Delhaize Group SA, is a Belgium-based food retailer. The Company operates through three segments: the United States, including Food Lion and Hannaford banners; Belgium, including Delhaize Le Lion and AD Delhaize banners, and Southeastern Europe (SEE), including Alfa Beta, Mega Image and Shop&Go banners. The Company is principally engaged in the operation of food supermarkets through Company-operated, affiliated and franchised stores. Affiliated stores are with its banners that are operated by independent third parties to whom the Company sells its products at wholesale prices. Its store network also includes other store formats, such as proximity, cash and carry, and specialty stores. The Company has stores located in the United States (Northeast, Southeast and Mid-Atlantic), Belgium, Luxembourg, Greece, Serbia, Romania and Indonesia. The Company operates over 3,510 stores.

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