Financial Review: Sprouts Farmers Market (SFM) vs. Koninklijke Ahold (ADRNY)

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Sprouts Farmers Market (OTCMKTS: ADRNY) and Koninklijke Ahold (OTCMKTS:ADRNY) are both retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, risk, analyst recommendations, earnings, institutional ownership, valuation and dividends.

Institutional and Insider Ownership

95.8% of Sprouts Farmers Market shares are owned by institutional investors. Comparatively, 0.5% of Koninklijke Ahold shares are owned by institutional investors. 1.8% of Sprouts Farmers Market shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Sprouts Farmers Market has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500. Comparatively, Koninklijke Ahold has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500.

Dividends

Koninklijke Ahold pays an annual dividend of $0.65 per share and has a dividend yield of 2.7%. Sprouts Farmers Market does not pay a dividend. Koninklijke Ahold pays out 47.1% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of current ratings and price targets for Sprouts Farmers Market and Koninklijke Ahold, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sprouts Farmers Market 1 8 9 0 2.44
Koninklijke Ahold 0 2 0 0 2.00

Sprouts Farmers Market currently has a consensus price target of $26.50, suggesting a potential upside of 9.32%. Given Sprouts Farmers Market’s stronger consensus rating and higher probable upside, equities analysts clearly believe Sprouts Farmers Market is more favorable than Koninklijke Ahold.

Profitability

This table compares Sprouts Farmers Market and Koninklijke Ahold’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sprouts Farmers Market 3.62% 25.56% 9.98%
Koninklijke Ahold 3.13% 11.20% 4.94%

Earnings and Valuation

This table compares Sprouts Farmers Market and Koninklijke Ahold’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sprouts Farmers Market $4.66 billion 0.66 $158.44 million $1.01 24.00
Koninklijke Ahold $71.04 billion 0.42 $2.05 billion $1.38 17.30

Koninklijke Ahold has higher revenue and earnings than Sprouts Farmers Market. Koninklijke Ahold is trading at a lower price-to-earnings ratio than Sprouts Farmers Market, indicating that it is currently the more affordable of the two stocks.

Summary

Sprouts Farmers Market beats Koninklijke Ahold on 12 of the 16 factors compared between the two stocks.

About Sprouts Farmers Market

Sprouts Farmers Market, Inc., a healthy grocery store, provides fresh, natural, and organic food products in the United States. Its stores offer fresh produce, meat and seafood, deli and baked goods, packaged groceries, vitamins and supplements, bulk foods, dairy and dairy alternatives, frozen foods, beer and wine, and natural body care and household items. As of December 31, 2017, it operated 285 stores in 15 states. Sprouts Farmers Market, Inc. was founded in 2002 and is based in Phoenix, Arizona.

About Koninklijke Ahold

Koninklijke Ahold Delhaize N.V. operates retail food stores primarily in the United States and Europe. The company's store formats include supermarkets, superstores, online grocery shopping, convenience stores, drugstores, wine and liquor stores, online shopping for general merchandise, and compact hyper and supermarkets. As of December 31, 2017, it operated 6,637 stores primarily under 20 brands serving approximately 50 million customers, as well as online. The company was formerly known as Koninklijke Ahold N.V. and changed its name to Koninklijke Ahold Delhaize N.V. in July 2016. Koninklijke Ahold Delhaize N.V. was founded in 1887 and is headquartered in Zaandam, the Netherlands.

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