Sprouts Farmers Market (NASDAQ: SFM) and Companhia Brasileira de Distribuicao (NYSE:CBD) are both mid-cap retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, valuation, profitability, earnings and risk.

Risk and Volatility

Sprouts Farmers Market has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500. Comparatively, Companhia Brasileira de Distribuicao has a beta of 1.84, suggesting that its stock price is 84% more volatile than the S&P 500.

Valuation & Earnings

This table compares Sprouts Farmers Market and Companhia Brasileira de Distribuicao’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sprouts Farmers Market $4.34 billion 0.59 $295.71 million $0.90 20.91
Companhia Brasileira de Distribuicao $13.52 billion 0.49 $772.66 million $0.14 176.86

Companhia Brasileira de Distribuicao has higher revenue and earnings than Sprouts Farmers Market. Sprouts Farmers Market is trading at a lower price-to-earnings ratio than Companhia Brasileira de Distribuicao, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

88.0% of Sprouts Farmers Market shares are held by institutional investors. Comparatively, 3.5% of Companhia Brasileira de Distribuicao shares are held by institutional investors. 2.6% of Sprouts Farmers Market shares are held by company insiders. Comparatively, 0.0% of Companhia Brasileira de Distribuicao shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Sprouts Farmers Market and Companhia Brasileira de Distribuicao’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sprouts Farmers Market 2.96% 18.79% 8.65%
Companhia Brasileira de Distribuicao 0.27% 5.46% 1.65%

Analyst Ratings

This is a summary of current ratings and price targets for Sprouts Farmers Market and Companhia Brasileira de Distribuicao, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sprouts Farmers Market 1 10 9 0 2.40
Companhia Brasileira de Distribuicao 0 3 1 0 2.25

Sprouts Farmers Market currently has a consensus target price of $25.27, suggesting a potential upside of 34.25%. Given Sprouts Farmers Market’s stronger consensus rating and higher probable upside, analysts clearly believe Sprouts Farmers Market is more favorable than Companhia Brasileira de Distribuicao.

Summary

Sprouts Farmers Market beats Companhia Brasileira de Distribuicao on 10 of the 14 factors compared between the two stocks.

Sprouts Farmers Market Company Profile

Sprouts Farmers Market, Inc. is a food retailer. The Company operates as a grocery store that offers fresh, natural and organic food that includes fresh produce, bulk foods, vitamins and supplements, packaged groceries, meat and seafood, deli, baked goods, dairy products, frozen foods, body care and natural household items catering to consumers’ interest in health and wellness. As of February 23, 2017, the Company operated 256 stores in 14 states. The Company categorizes the varieties of products it sells as perishable and non-perishable. The perishable product categories include produce, meat, seafood, deli and bakery. Its non-perishable product categories include grocery, vitamins and supplements, bulk items, dairy and dairy alternatives, frozen foods, beer and wine, and natural health and body care.

Companhia Brasileira de Distribuicao Company Profile

Companhia Brasileira de Distribuicao, directly or through its subsidiaries, is engaged in the retail of food, clothing, home appliances, electronics and other items through its chain of hypermarkets, supermarkets, specialized stores and department stores principally under the trade names Pao de Acucar, Minuto Pao de Acucar, Extra Hiper, Extra Super, Minimercado Extra, Assai an the neighborhood shopping mall brand Conviva. The Company’s segments include Retail, and Cash and carry segment. The Company’s Retail segment includes the banners Pao de Acucar, Minuto Pao de Acucar, Extra Hiper, Extra Supermercado, Minimercado Extra, Posto Extra, Drogaria Extra and GPA Malls & Properties. Its Cash & Carry segment includes the brand Assai. The Company is engaged in operations of retail stores located in approximately 20 states and the Federal District of Brazil.

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