Ingles Markets (NASDAQ:IMKTA) versus Grocery Outlet (NASDAQ:GO) Critical Survey

Grocery Outlet (NASDAQ:GO) and Ingles Markets (NASDAQ:IMKTA) are both consumer staples companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, institutional ownership, valuation and profitability.

Profitability

This table compares Grocery Outlet and Ingles Markets’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Grocery Outlet 2.24% 15.05% 5.19%
Ingles Markets 3.16% 20.15% 7.32%

Valuation and Earnings

This table compares Grocery Outlet and Ingles Markets’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Grocery Outlet $2.56 billion 1.48 $15.42 million $0.79 52.42
Ingles Markets $4.20 billion 0.19 $81.58 million $4.03 9.61

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

Institutional and Insider Ownership

66.6% of Ingles Markets shares are owned by institutional investors. 15.5% of Grocery Outlet shares are owned by insiders. Comparatively, 29.5% of Ingles Markets shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for Grocery Outlet and Ingles Markets, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Grocery Outlet 0 0 0 0 N/A
Ingles Markets 0 0 0 0 N/A

Volatility and Risk

Grocery Outlet has a beta of -0.15, indicating that its share price is 115% less volatile than the S&P 500. Comparatively, Ingles Markets has a beta of 0.67, indicating that its share price is 33% less volatile than the S&P 500.

Summary

Ingles Markets beats Grocery Outlet on 9 of the 11 factors compared between the two stocks.

Grocery Outlet Company Profile

Grocery Outlet Holding Corp. owns and operates a chain of grocery stores in the United States. The company offers products in various categories, such as dairy and deli, produce, and fresh meat and seafood products, as well as grocery, frozen, beer and wine, general merchandise, and health and beauty care products; and natural, organic, specialty, and healthy products. As of December 28, 2019, it had 347 stores, including 342 independent operated stores in California, Washington, Oregon, Pennsylvania, Idaho, and Nevada. The company was founded in 1946 and is headquartered in Emeryville, California.

Ingles Markets Company Profile

Ingles Markets, Incorporated operates a chain of supermarkets in the southeast United States. Its supermarkets offer various food products, including grocery, meat and dairy products, produce, frozen foods, and other perishables; and non-food products, such as fuel centers, pharmacies, health and beauty care products, and general merchandise, as well as private label items. The company also provides home meal replacement items, delicatessens, bakeries, floral departments, and greeting cards, as well as organic, beverage, and health-related items. As of December 28, 2019, it operated 198 supermarkets, including 73 in North Carolina, 66 in Georgia, 36 in South Carolina, 21 in Tennessee, 1 in Virginia, and 1 in Alabama; and 108 in-store pharmacies and 104 fuel centers. The company operates its supermarkets under the Ingles and Sav-Mor brand names. In addition, it is involved in the fluid dairy operation and shopping center rental businesses. Ingles Markets, Incorporated was founded in 1963 and is headquartered in Asheville, North Carolina.

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