Metro (MTRAF) vs. Smart & Final Stores (SFS) Critical Review

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Metro (NYSE: SFS) and Smart & Final Stores (NYSE:SFS) are both consumer defensive companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, risk, profitability, valuation, analyst recommendations, dividends and institutional ownership.

Insider & Institutional Ownership

93.3% of Smart & Final Stores shares are held by institutional investors. 9.6% of Smart & Final Stores shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Metro and Smart & Final Stores’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Metro N/A N/A N/A
Smart & Final Stores -3.04% 5.62% 1.35%

Analyst Ratings

This is a summary of current recommendations for Metro and Smart & Final Stores, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Metro 0 0 0 0 N/A
Smart & Final Stores 1 5 2 0 2.13

Smart & Final Stores has a consensus target price of $7.81, suggesting a potential upside of 21.12%. Given Smart & Final Stores’ higher possible upside, analysts plainly believe Smart & Final Stores is more favorable than Metro.

Risk & Volatility

Metro has a beta of 0.54, meaning that its stock price is 46% less volatile than the S&P 500. Comparatively, Smart & Final Stores has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500.

Valuation and Earnings

This table compares Metro and Smart & Final Stores’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Metro N/A N/A N/A N/A N/A
Smart & Final Stores $4.57 billion 0.11 -$138.91 million $0.34 18.97

Metro has higher earnings, but lower revenue than Smart & Final Stores.

Summary

Smart & Final Stores beats Metro on 8 of the 9 factors compared between the two stocks.

Metro Company Profile

Metro Inc. operates as a retailer and distributor in the food and pharmaceutical sectors in Canada. It operates supermarkets, discount and drug stores, and food stores that provide grocery products, general merchandise, non-perishable goods, dairy products, prepared meals, fruits and vegetables, meats, and frozen foods. The company also acts as a franchisor and distributor for 183 drugstores owned by independent pharmacists under the Brunet Plus, Brunet, Brunet Clinique, and Clini Plus brands. It operates a network of 335 supermarkets under the Metro and Metro Plus brands; 226 discount stores under the Super C and Food Basics names; 11 stores under the Adonis banner; and 73 drugstores under the Metro Pharmacy and Drug Basics banners. In addition, the company is involved in the sale of bakery, pastry, charcutery, and other food products under Première Moisson brand; and online sale of meal through MissFresh brand. Metro Inc. was founded in 1947 and is headquartered in Montréal, Canada.

Smart & Final Stores Company Profile

Smart & Final Stores, Inc. operates as a food retailer in the United States. It operates in two segments, Smart & Final, and Cash & Carry Smart Foodservice. The company's stores offer fresh perishables and everyday grocery items, such as produce, meat and deli, dairy and cheese, grocery, and beverage products, as well as paper and packaging, and restaurant equipment and janitorial supplies. It also provides various private label products under the First Street, Sun Harvest, Simply Value, La Romanella, Montecito, Iris, and Ambiance brands. The company sells its products to household and business customers; restaurants; caterers; and various other foodservice businesses, such as food trucks and coffee houses through vendors and suppliers. As of June 17, 2018, it operated 322 grocery and foodservice stores under the Smart & Final, Smart & Final Extra !, and Smart Foodservice Warehouse Stores names in California, Oregon, Washington, Arizona, Nevada, Idaho, Montana, and Utah, as well as 15 stores in Northwestern Mexico operated through a joint venture. Smart & Final Stores, Inc. was founded in 1871 and is based in Commerce, California.

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