Head-To-Head Review: Sprouts Farmers Market (NASDAQ:SFM) versus Loblaw Companies (OTCMKTS:LBLCF)

Loblaw Companies (OTCMKTS:LBLCF) and Sprouts Farmers Market (NASDAQ:SFM) are both consumer defensive companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, institutional ownership, risk and dividends.

Valuation & Earnings

This table compares Loblaw Companies and Sprouts Farmers Market’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Loblaw Companies	N/A	N/A	N/A	($0.22)	-512.01
Sprouts Farmers Market	$6.84 billion	1.19	$258.86 million	$2.90	27.82

Sprouts Farmers Market has higher revenue and earnings than Loblaw Companies. Loblaw Companies is trading at a lower price-to-earnings ratio than Sprouts Farmers Market, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Loblaw Companies and Sprouts Farmers Market, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Loblaw Companies	0	0	0	0	N/A
Sprouts Farmers Market	2	5	2	0	2.00

Loblaw Companies currently has a consensus target price of $91.50, indicating a potential downside of 19.23%. Sprouts Farmers Market has a consensus target price of $57.25, indicating a potential downside of 29.05%. Given Loblaw Companies’ higher probable upside, analysts plainly believe Loblaw Companies is more favorable than Sprouts Farmers Market.

Profitability

This table compares Loblaw Companies and Sprouts Farmers Market’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Loblaw Companies	N/A	N/A	N/A
Sprouts Farmers Market	4.25%	26.77%	9.16%

Institutional & Insider Ownership

70.9% of Loblaw Companies shares are held by institutional investors. 1.1% of Sprouts Farmers Market shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Sprouts Farmers Market beats Loblaw Companies on 8 of the 10 factors compared between the two stocks.

About Loblaw Companies

Loblaw Companies Limited, a food and pharmacy company, provides grocery, pharmacy and healthcare services, health and beauty products, apparels, general merchandise, financial services, and wireless mobile products and services in Canada. It operates in two segments, Retail and Financial Services. The Retail segment operates corporate and franchise-owned retail food, and associate-owned drug stores. This segment also includes in-store pharmacies, health care services, other health and beauty product stores, apparel stores, and other general merchandise stores. The Financial Services segment provides credit card and banking services, the PC Optimum loyalty program, insurance brokerage services, and telecommunication services. The company offers PC Health app. It provides its products and services under various brands. The company was founded in 1919 and is headquartered in Brampton, Canada. Loblaw Companies Limited operates as a subsidiary of George Weston Limited.

About Sprouts Farmers Market

Sprouts Farmers Market, Inc., together with its subsidiaries, engages in the retailing of fresh, natural, and organic food products under the Sprouts brand in the United States. It offers perishable product categories, including fresh produce, meat and meat alternatives, seafood, deli, bakery, floral, and dairy and dairy alternatives; and non-perishable product categories, such as grocery, vitamins and supplements, bulk items, frozen foods, beer and wine, and natural health and body care. Sprouts Farmers Market, Inc. was founded in 1943 and is headquartered in Phoenix, Arizona.