Safeway (NYSE: SWY) and DAVIDsTEA (NASDAQ:DTEA) are both non-cyclical consumer goods & services companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, valuation, risk, institutional ownership, earnings, analyst recommendations and dividends.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Safeway N/A N/A N/A $0.12 292.50
DAVIDsTEA $164.02 million 0.74 -$4.83 million ($0.26) -16.15

Safeway has higher revenue, but lower earnings than DAVIDsTEA. DAVIDsTEA is trading at a lower price-to-earnings ratio than Safeway, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Safeway and DAVIDsTEA, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Safeway 0 0 0 0 N/A
DAVIDsTEA 1 3 0 0 1.75

DAVIDsTEA has a consensus target price of $6.75, suggesting a potential upside of 60.71%. Given DAVIDsTEA’s higher probable upside, analysts clearly believe DAVIDsTEA is more favorable than Safeway.

Institutional & Insider Ownership

10.5% of DAVIDsTEA shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Safeway and DAVIDsTEA’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Safeway -0.26% -1.66% -0.69%
DAVIDsTEA -3.98% 1.51% 1.19%

Volatility & Risk

Safeway has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500. Comparatively, DAVIDsTEA has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500.

Summary

DAVIDsTEA beats Safeway on 5 of the 8 factors compared between the two stocks.

About Safeway

Safeway Inc., is an food and drug retail company. The Company owns and operates GroceryWorks.com Operating Company, LLC, an online grocery channel doing business under the names Safeway.com and Vons.com. Blackhawk, a majority-owned subsidiary of Safeway, is a prepaid payment network utilizing proprietary technology to offer gift cards, other prepaid products and payment services. Blackhawk’s payment network supports its three primary constituents: consumers who purchase the products and services Blackhawk offers, content providers who offer branded products that are redeemable for goods and services, and distribution partners who sell the products. Blackhawk’s product offerings include gift cards, prepaid telecom products and prepaid financial services products, including general purpose reloadable cards and Blackhawk’s reload network.

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.

Receive News & Ratings for Safeway Inc Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Safeway Inc and related companies with Analyst Ratings Network's FREE daily email newsletter.