Analyzing Grocery Outlet (NASDAQ:GO) and BBB Foods (NYSE:TBBB)

Grocery Outlet (NASDAQ:GO) and BBB Foods (NYSE:TBBB) are both consumer staples companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, dividends, risk, analyst recommendations, valuation and institutional ownership.

Valuation and Earnings

This table compares Grocery Outlet and BBB Foods”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Grocery Outlet	$4.69 billion	0.15	-$224.91 million	($2.29)	-3.07
BBB Foods	$4.08 billion	1.05	-$148.23 million	($1.32)	-28.50

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

Profitability

This table compares Grocery Outlet and BBB Foods’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Grocery Outlet	-4.80%	5.93%	2.07%
BBB Foods	-3.72%	-70.80%	-11.06%

Institutional & Insider Ownership

99.9% of Grocery Outlet shares are held by institutional investors. Comparatively, 8.4% of BBB Foods shares are held by institutional investors. 4.5% of Grocery Outlet shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Grocery Outlet has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500. Comparatively, BBB Foods has a beta of 0.01, indicating that its share price is 99% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Grocery Outlet and BBB Foods, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Grocery Outlet	2	11	0	0	1.85
BBB Foods	2	2	4	0	2.25

Grocery Outlet currently has a consensus price target of $10.68, suggesting a potential upside of 52.16%. BBB Foods has a consensus price target of $39.50, suggesting a potential upside of 5.01%. Given Grocery Outlet’s higher probable upside, equities analysts plainly believe Grocery Outlet is more favorable than BBB Foods.

Summary

Grocery Outlet beats BBB Foods on 8 of the 14 factors compared between the two stocks.

About Grocery Outlet

Grocery Outlet Holding Corp. operates as a retailer of consumables and fresh products sold through independently operated stores in the United States. Its stores offer products in various categories, such as dairy and deli, produce, floral, fresh meat, seafood products, grocery, general merchandise, health and beauty care, frozen food, beer and wine, and ethnic products. The company was founded in 1946 and is headquartered in Emeryville, California.

About BBB Foods

BBB Foods Inc., through its subsidiaries, operates a chain of grocery retail stores in Mexico. It offers household cleaning, personal hyenine, cosmetics and beauty, pharmacy, and general merchandise products, as well as jellies and desserts, foods and drinks, pet supplies, coffee, tea, chocolates, breads, dry and frozen foods, snacks and sweets, and toilet papers and napkins. The company also provides branded, private label, and spot products. It serves low-to-middle income households through online channels. BBB Foods Inc. was incorporated in 2004 and is headquartered in Mexico City, Mexico.