Financial Contrast: Village Super Market (NASDAQ:VLGEA) and Dollar General (NYSE:DG)

Village Super Market (NASDAQ:VLGEA) and Dollar General (NYSE:DG) are both consumer staples companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, institutional ownership, profitability, earnings, dividends, risk and analyst recommendations.

Dividends

Village Super Market pays an annual dividend of $1.00 per share and has a dividend yield of 2.4%. Dollar General pays an annual dividend of $2.36 per share and has a dividend yield of 1.8%. Village Super Market pays out 28.2% of its earnings in the form of a dividend. Dollar General pays out 30.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Village Super Market is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Village Super Market and Dollar General”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Village Super Market	$2.41 billion	0.26	$52.46 million	$3.55	11.91
Dollar General	$42.72 billion	0.69	$1.51 billion	$7.69	17.43

Dollar General has higher revenue and earnings than Village Super Market. Village Super Market is trading at a lower price-to-earnings ratio than Dollar General, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Village Super Market and Dollar General’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Village Super Market	2.18%	10.23%	5.17%
Dollar General	3.90%	18.93%	5.21%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Village Super Market and Dollar General, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Village Super Market	0	0	1	0	3.00
Dollar General	1	15	13	0	2.41

Dollar General has a consensus target price of $137.96, indicating a potential upside of 2.91%. Given Dollar General’s higher probable upside, analysts clearly believe Dollar General is more favorable than Village Super Market.

Insider & Institutional Ownership

39.0% of Village Super Market shares are owned by institutional investors. Comparatively, 91.8% of Dollar General shares are owned by institutional investors. 59.0% of Village Super Market shares are owned by insiders. Comparatively, 0.6% of Dollar General shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Village Super Market has a beta of 0.45, indicating that its share price is 55% less volatile than the S&P 500. Comparatively, Dollar General has a beta of 0.19, indicating that its share price is 81% less volatile than the S&P 500.

Summary

Dollar General beats Village Super Market on 11 of the 16 factors compared between the two stocks.

About Village Super Market

Village Super Market, Inc. operates grocery stores, primarily under the ShopRite banner. Its supermarkets offer a broad range of food and household products, including fresh produce, meat, seafood, bakery and deli items, as well as prepared foods and other services. The company also operates specialty food stores under the Gourmet Garage name. Its stores serve communities in New Jersey, New York, Maryland and Pennsylvania, with Gourmet Garage locations in New York City. Village Super Market’s roots trace back to 1937, when the Sumas family began its grocery business.

About Dollar General

Dollar General Corporation is an American discount retailer that operates neighborhood stores offering everyday essentials at value-oriented prices. Its merchandise includes food and household supplies, cleaning products, health and beauty items, seasonal goods, apparel, and home products, with a mix of national brands and private-label products. The company traces its roots to J.L. Turner & Son, a family-owned business established in 1939. The first store operating under the Dollar General name opened in Springfield, Kentucky, in 1955.