Critical Comparison: Sendas Distribuidora (NYSE:ASAI) and Axfood AB (publ) (OTCMKTS:AXFOF)

Sendas Distribuidora (NYSE:ASAI) and Axfood AB (publ) (OTCMKTS:AXFOF) are both consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, earnings, dividends and risk.

Institutional & Insider Ownership

8.8% of Sendas Distribuidora shares are held by institutional investors. Comparatively, 13.8% of Axfood AB (publ) shares are held by institutional investors. 0.4% of Sendas Distribuidora shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Sendas Distribuidora pays an annual dividend of $0.05 per share and has a dividend yield of 0.4%. Axfood AB (publ) pays an annual dividend of $15.00 per share and has a dividend yield of 61.8%. Sendas Distribuidora pays out 9.4% of its earnings in the form of a dividend. Axfood AB (publ) pays out 73.4% 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.

Profitability

This table compares Sendas Distribuidora and Axfood AB (publ)’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sendas Distribuidora	1.07%	16.78%	1.75%
Axfood AB (publ)	N/A	N/A	N/A

Analyst Recommendations

This is a summary of current ratings and price targets for Sendas Distribuidora and Axfood AB (publ), as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sendas Distribuidora	0	0	2	0	3.00
Axfood AB (publ)	0	0	0	0	N/A

Sendas Distribuidora currently has a consensus price target of $17.00, indicating a potential upside of 26.87%. Given Sendas Distribuidora’s higher probable upside, research analysts plainly believe Sendas Distribuidora is more favorable than Axfood AB (publ).

Earnings & Valuation

This table compares Sendas Distribuidora and Axfood AB (publ)’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sendas Distribuidora	$13.32 billion	0.27	$142.21 million	$0.53	25.28
Axfood AB (publ)	N/A	N/A	N/A	$20.44	1.19

Sendas Distribuidora has higher revenue and earnings than Axfood AB (publ). Axfood AB (publ) is trading at a lower price-to-earnings ratio than Sendas Distribuidora, indicating that it is currently the more affordable of the two stocks.

Summary

Sendas Distribuidora beats Axfood AB (publ) on 9 of the 12 factors compared between the two stocks.

About Sendas Distribuidora

Sendas Distribuidora S.A. engages in the retail and wholesale sale of food products, bazaar items, and other products in Brazil. The company serves restaurants, pizzerias, snack bars, schools, small businesses, religious institutions, hospitals, hotels, grocery stores, neighborhood supermarkets, and individuals. It sells its products through brick-and-mortar stores, as well as through telesales. The company was founded in 1974 and is headquartered in Rio de Janeiro, Brazil.

About Axfood AB (publ)

Axfood AB (publ) engages in the food retail and wholesale businesses primarily in Sweden. It operates through four segments: Willys, Hemköp, Dagab, and Snabbgross. The company sells groceries through Willys, HANDLAR'N, Hemköp, and Eurocash store chains. It is also involved in the e-commerce business; and provision of private label products. In addition, it offers home delivery of meal kits under the Middagsfrid name, as well as operates Urban Deli, a combination of restaurant and market hall; Apohem, an online retail pharmacy; Matöppe, a personal grocery store and the retailer-owned mini-mart; Snabbgriss, a restaurant; and Tempo, a mini-mart format of retailer-owned stores. The company serves restaurants, fastfood operators, and cafés; and retailer-owned stores, mini-marts, and other convenience retailers. Axfood AB (publ) was founded in 1958 and is headquartered in Stockholm, Sweden. Axfood AB (publ) operates as a subsidiary of Axretail AB.