Analyzing Core-Mark (CORE) and United Natural Foods (UNFI)

Core-Mark (NASDAQ: CORE) and United Natural Foods (NASDAQ:UNFI) are both business services companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, risk, dividends, analyst recommendations, earnings and valuation.

Dividends

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Core-Mark pays an annual dividend of $0.40 per share and has a dividend yield of 1.9%. United Natural Foods does not pay a dividend. Core-Mark pays out 40.0% of its earnings in the form of a dividend.

Insider & Institutional Ownership

97.8% of Core-Mark shares are owned by institutional investors. 2.0% of Core-Mark shares are owned by insiders. Comparatively, 1.4% of United Natural Foods shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Core-Mark and United Natural Foods, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Core-Mark 0 3 3 1 2.71
United Natural Foods 4 9 5 0 2.06

Core-Mark currently has a consensus target price of $26.20, indicating a potential upside of 24.05%. United Natural Foods has a consensus target price of $44.67, indicating a potential upside of 1.75%. Given Core-Mark’s stronger consensus rating and higher possible upside, equities analysts plainly believe Core-Mark is more favorable than United Natural Foods.

Profitability

This table compares Core-Mark and United Natural Foods’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Core-Mark 0.21% 8.84% 2.99%
United Natural Foods 1.61% 8.49% 4.83%

Earnings and Valuation

This table compares Core-Mark and United Natural Foods’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Core-Mark $15.69 billion 0.06 $33.50 million $1.00 21.12
United Natural Foods $9.27 billion 0.24 $130.15 million $2.57 17.08

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

Volatility and Risk

Core-Mark has a beta of 0.59, indicating that its share price is 41% less volatile than the S&P 500. Comparatively, United Natural Foods has a beta of 1.44, indicating that its share price is 44% more volatile than the S&P 500.

Summary

Core-Mark beats United Natural Foods on 9 of the 17 factors compared between the two stocks.

About Core-Mark

Core-Mark Holding Company, Inc. markets fresh and broad-line supply solutions to the convenience retail industry. The company sells and distributes various food/non-food products, including cigarettes, fast food, candies, snacks, groceries, fresh products, dairy products, breads, beverages, other tobacco products, general merchandise and equipment, and health and beauty care products. Its customers include traditional convenience stores, such as national and super-regional convenience store operators, as well as independently owned convenience stores; and alternative outlets, which include grocery stores, drug stores, big box or supercenter stores, liquor stores, cigarette and tobacco shops, hotel gift shops, military exchanges, college and corporate campuses, casinos, hardware stores, airport concessions, and other specialty and small format stores that carry convenience products. The company offers its products to 45,000 customer locations through a network of distribution centers in the United States and Canada. Core-Mark Holding Company, Inc. was founded in 1888 and is headquartered in South San Francisco, California.

About United Natural Foods

United Natural Foods, Inc., together with its subsidiaries, distributes natural, organic, and specialty foods and non-food products in the United States and Canada. The company operates through three divisions: Wholesale, Retail, and Manufacturing and Branded Products. The Wholesale division offers grocery and general merchandise, produce, perishables and frozen foods, nutritional supplements and sports nutrition, bulk and foodservice products, and personal care products. This segment also distributes an array of specialty protein, cheese, deli, food service, and bakery goods; and organic and conventional produce and non-produce perishable items, and natural and organic specialty and gourmet ethnic products, as well as vitamins and minerals. The Retail division operates 12 natural products retail stores in Florida, Maryland, Massachusetts, and Rhode Island. The Manufacturing and Branded Products division is involved in importing, roasting, packaging, and distributing nuts, dried fruits, seeds, trail mixes, granola, natural and organic snack items, and confections. This segment also provides Blue Marble Brands products on wholesale basis through third-party distributors in organic, natural, and specialty food brands, as well as directly to retailers; and Field Day brand products primarily to customers through its independent natural products retailer channel. The company serves independently owned natural products retailers, supernatural chains, conventional supermarkets, and mass market chains, as well as foodservice, e-commerce, and international customers outside Canada. United Natural Foods, Inc. was founded in 1976 and is headquartered in Providence, Rhode Island.

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