Kroger (NYSE: KR) and Red Robin Gourmet Burgers (NASDAQ:RRGB) are both retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, earnings, profitability, institutional ownership, valuation and analyst recommendations.
This is a summary of current recommendations and price targets for Kroger and Red Robin Gourmet Burgers, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Red Robin Gourmet Burgers||0||5||6||0||2.55|
Kroger pays an annual dividend of $0.50 per share and has a dividend yield of 2.1%. Red Robin Gourmet Burgers does not pay a dividend. Kroger pays out 23.7% of its earnings in the form of a dividend. Kroger has increased its dividend for 9 consecutive years.
This table compares Kroger and Red Robin Gourmet Burgers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Red Robin Gourmet Burgers||2.17%||8.63%||3.57%|
Valuation and Earnings
This table compares Kroger and Red Robin Gourmet Burgers’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Kroger||$122.66 billion||0.17||$1.91 billion||$2.11||11.03|
|Red Robin Gourmet Burgers||$1.38 billion||0.55||$30.01 million||$2.31||25.24|
Kroger has higher revenue and earnings than Red Robin Gourmet Burgers. Kroger is trading at a lower price-to-earnings ratio than Red Robin Gourmet Burgers, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
75.7% of Kroger shares are held by institutional investors. 0.9% of Kroger shares are held by company insiders. Comparatively, 2.7% of Red Robin Gourmet Burgers shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Risk & Volatility
Kroger has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500. Comparatively, Red Robin Gourmet Burgers has a beta of 0.41, suggesting that its stock price is 59% less volatile than the S&P 500.
Kroger beats Red Robin Gourmet Burgers on 10 of the 17 factors compared between the two stocks.
Kroger 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.
Red Robin Gourmet Burgers Company Profile
Red Robin Gourmet Burgers, Inc., together with its subsidiaries, primarily develops, operates, and franchises full-service restaurants in North America and focuses on serving selection of gourmet burgers. The Company’s menu features a line of gourmet burgers, which it makes from ground beef, as well as its line of Red’s Tavern Double Burgers and its Red Robin’s line of half-pound Angus beef burgers with various toppings. The Company also offers burgers made from chicken breasts, fish fillets, turkey patties, as well as vegetarian and vegan options. The Company offered a selection of buns, including ciabatta, gluten free, sesame, onion, whole grain, jalapeno and lettuce wraps a range of toppings, including fresh guacamole, house made barbeque sauces, aiolis, grilled pineapple, crispy onion straws, sauteed mushrooms, fried jalapenos, bruschetta salsa, coleslaw, eight different cheese choices and a fried egg, as of December 25, 2016.
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