Comparing Metro (OTCMKTS:MTRAF) & Kroger (NYSE:KR)

Metro (OTCMKTS:MTRAF) and Kroger (NYSE:KR) are both large-cap consumer staples companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, valuation, profitability, dividends, risk and institutional ownership.

Insider and Institutional Ownership

80.9% of Kroger shares are held by institutional investors. 0.4% of Kroger shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for Metro and Kroger, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Metro	0	1	3	0	2.75
Kroger	0	9	12	0	2.57

Kroger has a consensus target price of $70.35, indicating a potential downside of 0.72%. Given Kroger’s higher possible upside, analysts clearly believe Kroger is more favorable than Metro.

Earnings & Valuation

This table compares Metro and Kroger”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Metro	$15.74 billion	0.92	$727.05 million	$3.04	22.89
Kroger	$147.64 billion	0.28	$1.02 billion	$1.84	38.51

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

Profitability

This table compares Metro and Kroger’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Metro	4.01%	14.24%	6.80%
Kroger	0.73%	49.90%	6.28%

Dividends

Metro pays an annual dividend of $1.14 per share and has a dividend yield of 1.6%. Kroger pays an annual dividend of $1.56 per share and has a dividend yield of 2.2%. Metro pays out 37.5% of its earnings in the form of a dividend. Kroger pays out 84.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kroger has raised its dividend for 20 consecutive years. Kroger is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Kroger beats Metro on 9 of the 16 factors compared between the two stocks.

About Metro

Metro Inc. is a Canadian food and pharmacy retailer serving customers primarily in Quebec and Ontario. Its grocery banners include Metro and Metro Plus, discount stores under the Super C and Food Basics names, and specialty food retailers such as Adonis. The company also provides online grocery shopping and operates food distribution and logistics services. In pharmacy, Metro operates and supports stores under banners including Jean Coutu and Brunet, as well as Metro Pharmacy. Its network includes both company-operated and franchised or affiliated locations.

About Kroger

The Kroger Co. is a U.S. grocery retailer founded in Cincinnati, Ohio, in 1883 by Bernard Kroger. It operates supermarkets and other grocery formats across the United States under banners including Kroger, Ralphs, Fred Meyer, Harris Teeter, King Soopers, and Smith’s. Alongside groceries and household essentials, Kroger stores offer services such as pharmacies and fuel centers. The company also sells products under its own private-label brands and produces many of those items through its food manufacturing operations.