Grocery Outlet (NASDAQ:GO) & Kenvue (NYSE:KVUE) Critical Review

Grocery Outlet (NASDAQ:GO) and Kenvue (NYSE:KVUE) are both consumer staples companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, dividends, analyst recommendations and valuation.

Analyst Ratings

This is a summary of current recommendations and price targets for Grocery Outlet and Kenvue, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Grocery Outlet	2	7	3	1	2.23
Kenvue	1	12	5	1	2.32

Grocery Outlet currently has a consensus target price of $15.73, suggesting a potential upside of 29.44%. Kenvue has a consensus target price of $20.17, suggesting a potential upside of 19.36%. Given Grocery Outlet’s higher possible upside, research analysts clearly believe Grocery Outlet is more favorable than Kenvue.

Earnings and Valuation

This table compares Grocery Outlet and Kenvue”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Grocery Outlet	$4.37 billion	0.27	$39.47 million	($0.05)	-243.00
Kenvue	$15.01 billion	2.16	$1.03 billion	$0.75	22.53

Kenvue has higher revenue and earnings than Grocery Outlet. Grocery Outlet is trading at a lower price-to-earnings ratio than Kenvue, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Grocery Outlet and Kenvue’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Grocery Outlet	-0.10%	5.86%	2.13%
Kenvue	9.55%	20.02%	7.74%

Risk and Volatility

Grocery Outlet has a beta of 0.33, meaning that its share price is 67% less volatile than the S&P 500. Comparatively, Kenvue has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500.

Institutional and Insider Ownership

99.9% of Grocery Outlet shares are owned by institutional investors. Comparatively, 97.6% of Kenvue shares are owned by institutional investors. 4.5% of Grocery Outlet shares are owned by insiders. Comparatively, 1.7% of Kenvue shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Kenvue beats Grocery Outlet on 11 of the 14 factors compared between the two stocks.

About Grocery Outlet

Grocery Outlet Holding Corp. operates as a retailer of consumables and fresh products sold through independently operated stores in the United States. Its stores offer products in various categories, such as dairy and deli, produce, floral, fresh meat, seafood products, grocery, general merchandise, health and beauty care, frozen food, beer and wine, and ethnic products. The company was founded in 1946 and is headquartered in Emeryville, California.

About Kenvue

Kenvue Inc. operates as a consumer health company worldwide. The company operates through three segments: Self Care, Skin Health and Beauty, and Essential Health. The Self Care segment offers cough, cold and allergy, pain care, digestive health, smoking cessation, eye care, and other products under the Tylenol, Motrin, Benadryl, Nicorette, Zarbee's, ORSLTM, Rhinocort, Calpol, and Zyrtec brands. The Skin Health and Beauty segment provides face and body care, hair, sun, and other care products under the Neutrogena, Aveeno, Dr.Ci:Labo, Le Petit Marseillais, Lubriderm, Rogaine, and OGX brand names. The Essential Health segment offers oral and baby, women's health, wound, and other care products under the Listerine, Johnson's, Band-Aid, and Stayfree, o.b., tampons, Carefree, and Desitin Diaper Rash brands. The company was incorporated in 2022 and is headquartered in Skillman, New Jersey.