Critical Contrast: Empire (OTCMKTS:EMLAF) and Woolworths Group (OTCMKTS:WOLWF)

Empire (OTCMKTS:EMLAF – Get Rating) and Woolworths Group (OTCMKTS:WOLWF – Get Rating) are both consumer defensive companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, profitability, dividends and risk.

Valuation & Earnings

This table compares Empire and Woolworths Group’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Empire	N/A	N/A	N/A	$2.61	9.56
Woolworths Group	N/A	N/A	N/A	$1.96	12.31

Empire is trading at a lower price-to-earnings ratio than Woolworths Group, indicating that it is currently the more affordable of the two stocks.

Dividends

Empire pays an annual dividend of $1.06 per share and has a dividend yield of 4.2%. Woolworths Group pays an annual dividend of $1.36 per share and has a dividend yield of 5.6%. Empire pays out 40.6% of its earnings in the form of a dividend. Woolworths Group pays out 69.5% 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 Empire and Woolworths Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Empire	N/A	N/A	N/A
Woolworths Group	N/A	N/A	N/A

Insider & Institutional Ownership

36.6% of Empire shares are held by institutional investors. Comparatively, 14.5% of Woolworths Group shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for Empire and Woolworths Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Empire	0	1	2	0	2.67
Woolworths Group	2	1	0	1	2.00

Empire currently has a consensus price target of $43.10, suggesting a potential upside of 72.54%. Woolworths Group has a consensus price target of $37.00, suggesting a potential upside of 53.62%. Given Empire’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Empire is more favorable than Woolworths Group.

Summary

Empire beats Woolworths Group on 6 of the 9 factors compared between the two stocks.

About Empire

(Get Rating)

Empire Co. Ltd. engages in the food retailing and corporate investment activities. It operates through the Food Retailing, and Investments & Other Operations segments. The Food Retailing Segment involves in the distribution of food products in Canada. The Investments & Other Operations segment consist equity accounted interest in Crombie REIT, and Genstar. The company was founded on February 12, 1963 and is headquartered in Stellarton, Canada.

About Woolworths Group

(Get Rating)

Woolworths Group Ltd. engages in the operation of general merchandise consumer stores and supermarkets in Australia, New Zealand and India. It operates through the following business segments: Australian Food, New Zealand Food, Endeavour Drinks, BIG W, and Hotels. The Australian Food segment procures food and liquor and products for resale to customers in Australia. The New Zealand Food segment acquires food, liquor, and products for resale to customers in New Zealand. The Endeavour Drinks segment resells drinks to customers in Australia. The BIG W segment handles the acquisition of genrel merchandise products for resale in Australia. The Hotels segment provides leisure and hospitality services including food and drinks, accommodation, entertainment and gaming in Australia. The company was founded by Percy Christmas, Stanley Edward Chatterton, Cecil Scott Waine, George William Percival Creed, and Ernest Robert Williams on December 5, 1924 and is headquartered in Sydney, Australia.