Kroger (NYSE:KR) & Tesco (OTCMKTS:TSCDY) Financial Analysis

Kroger (NYSE:KR) and Tesco (OTCMKTS:TSCDY) are both large-cap retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, profitability and institutional ownership.

Institutional & Insider Ownership

80.9% of Kroger shares are owned by institutional investors. Comparatively, 0.0% of Tesco shares are owned by institutional investors. 0.4% of Kroger shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kroger	$147.12 billion	0.30	$2.67 billion	$3.94	17.09
Tesco	$89.07 billion	0.45	$2.07 billion	N/A	N/A

Kroger has higher revenue and earnings than Tesco.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Kroger	1.86%	32.62%	5.79%
Tesco	N/A	N/A	N/A

Analyst Recommendations

This is a breakdown of recent ratings for Kroger and Tesco, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kroger	0	12	7	0	2.37
Tesco	0	2	3	0	2.60

Kroger currently has a consensus price target of $70.58, indicating a potential upside of 4.82%. Given Kroger’s higher possible upside, research analysts clearly believe Kroger is more favorable than Tesco.

Dividends

Kroger pays an annual dividend of $1.40 per share and has a dividend yield of 2.1%. Tesco pays an annual dividend of $0.78 per share and has a dividend yield of 4.3%. Kroger pays out 35.5% of its earnings in the form of a dividend. Kroger has raised its dividend for 19 consecutive years.

Risk & Volatility

Kroger has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500. Comparatively, Tesco has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500.

Summary

Kroger beats Tesco on 10 of the 15 factors compared between the two stocks.

About Kroger

The Kroger Co. operates as a food and drug retailer in the United States. The company operates combination food and drug stores, multi-department stores, marketplace stores, and price impact warehouses. Its combination food and drug stores offer natural food and organic sections, pharmacies, general merchandise, pet centers, fresh seafood, and organic produce; and multi-department stores provide apparel, home fashion and furnishings, outdoor living, electronics, automotive products, and toys. The company’s marketplace stores offer full-service grocery, pharmacy, health and beauty care, and perishable goods, as well as general merchandise, including apparel, home goods, and toys; and price impact warehouse stores provide grocery, and health and beauty care items, as well as meat, dairy, baked goods, and fresh produce items. It also manufactures and processes food products for sale in its supermarkets and online; and sells fuel through fuel centers. The Kroger Co. was founded in 1883 and is based in Cincinnati, Ohio.

About Tesco

Tesco PLC, together with its subsidiaries, operates as a grocery retailer in the United Kingdom, Republic of Ireland, the Czech Republic, Slovakia, and Hungary. It offers grocery products through its stores, as well as online. The company is also involved in the food and drink wholesaling activities. In addition, it provides banking and insurance and mobile operating services. Further, the company operates a network of one stop convenience stores; and offers data science, technology, software, and consultancy services. Tesco PLC was founded in 1919 and is headquartered in Welwyn Garden City, the United Kingdom.