Kroger (NYSE: KR) and Krispy Kreme Doughnuts (NYSE:KKD) are both non-cyclical consumer goods & services companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.

Dividends

Kroger pays an annual dividend of $0.50 per share and has a dividend yield of 1.8%. Krispy Kreme Doughnuts does not pay a dividend. Kroger pays out 29.8% of its earnings in the form of a dividend. Krispy Kreme Doughnuts has raised its dividend for 9 consecutive years.

Volatility and Risk

Kroger has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500. Comparatively, Krispy Kreme Doughnuts has a beta of 1.52, meaning that its share price is 52% more volatile than the S&P 500.

Valuation & Earnings

This table compares Kroger and Krispy Kreme Doughnuts’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kroger $115.34 billion 0.22 $1.98 billion $1.68 16.75
Krispy Kreme Doughnuts N/A N/A N/A $0.47 44.68

Kroger has higher revenue and earnings than Krispy Kreme Doughnuts. Kroger is trading at a lower price-to-earnings ratio than Krispy Kreme Doughnuts, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Kroger and Krispy Kreme Doughnuts’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kroger 1.31% 28.60% 4.94%
Krispy Kreme Doughnuts 6.90% 15.58% 11.41%

Insider and Institutional Ownership

79.6% of Kroger shares are owned by institutional investors. 0.9% of Kroger shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Kroger and Krispy Kreme Doughnuts, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kroger 0 13 11 0 2.46
Krispy Kreme Doughnuts 0 0 0 0 N/A

Kroger currently has a consensus target price of $30.17, suggesting a potential upside of 7.22%. Given Kroger’s higher possible upside, analysts plainly believe Kroger is more favorable than Krispy Kreme Doughnuts.

Summary

Kroger beats Krispy Kreme Doughnuts on 8 of the 14 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.

Krispy Kreme Doughnuts Company Profile

Krispy Kreme Doughnuts, Inc. is a retailer and wholesaler of doughnuts, complementary beverages, and treats and packaged sweets. The Company’s principal business includes owning and franchising Krispy Kreme stores, at which a range of doughnuts, including the Company’s Original Glazed doughnut, together with complementary products, including an array of coffees and other beverages. The Company operates through four business segments: Company Stores, Domestic Franchise, International Franchise and KK Supply Chain. The Company Stores segment includes the doughnut shops operated by the Company. The Domestic Franchise segment consists of the Company’s domestic store franchise operations and the licensing of Krispy Kreme products domestically. The International Franchise segment consists of the Company’s international store franchise operations. The KK Supply Chain segment produces doughnut mixes and manufactures doughnut-making equipment.

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