Head-To-Head Analysis: Arko (NASDAQ:ARKO) & Axfood AB (publ) (OTCMKTS:AXFOF)

Axfood AB (publ) (OTCMKTS:AXFOF) and Arko (NASDAQ:ARKO) are both consumer defensive companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, profitability, dividends, analyst recommendations, valuation and institutional ownership.

Profitability

This table compares Axfood AB (publ) and Arko’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Axfood AB (publ)	N/A	N/A	N/A
Arko	0.37%	12.32%	0.94%

Earnings and Valuation

This table compares Axfood AB (publ) and Arko’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Axfood AB (publ)	N/A	N/A	N/A	$20.44	1.19
Arko	$9.41 billion	0.05	$34.37 million	$0.25	17.48

Arko has higher revenue and earnings than Axfood AB (publ). Axfood AB (publ) is trading at a lower price-to-earnings ratio than Arko, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and price targets for Axfood AB (publ) and Arko, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Axfood AB (publ)	0	0	0	0	N/A
Arko	0	2	1	0	2.33

Arko has a consensus target price of $8.25, indicating a potential upside of 88.79%. Given Arko’s higher possible upside, analysts clearly believe Arko is more favorable than Axfood AB (publ).

Dividends

Axfood AB (publ) pays an annual dividend of $15.00 per share and has a dividend yield of 61.8%. Arko pays an annual dividend of $0.12 per share and has a dividend yield of 2.7%. Axfood AB (publ) pays out 73.4% of its earnings in the form of a dividend. Arko pays out 48.0% 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.

Insider & Institutional Ownership

13.8% of Axfood AB (publ) shares are held by institutional investors. Comparatively, 78.3% of Arko shares are held by institutional investors. 32.2% of Arko shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Arko beats Axfood AB (publ) on 10 of the 12 factors compared between the two stocks.

About Axfood AB (publ)

Axfood AB (publ) engages in the food retail and wholesale businesses primarily in Sweden. It operates through four segments: Willys, Hemköp, Dagab, and Snabbgross. The company sells groceries through Willys, HANDLAR'N, Hemköp, and Eurocash store chains. It is also involved in the e-commerce business; and provision of private label products. In addition, it offers home delivery of meal kits under the Middagsfrid name, as well as operates Urban Deli, a combination of restaurant and market hall; Apohem, an online retail pharmacy; Matöppe, a personal grocery store and the retailer-owned mini-mart; Snabbgriss, a restaurant; and Tempo, a mini-mart format of retailer-owned stores. The company serves restaurants, fastfood operators, and cafés; and retailer-owned stores, mini-marts, and other convenience retailers. Axfood AB (publ) was founded in 1958 and is headquartered in Stockholm, Sweden. Axfood AB (publ) operates as a subsidiary of Axretail AB.

About Arko

Arko Corp. operates convenience stores in the United States. It operates through Retail, Wholesale, Fleet Fueling, and GPMP segments. The Retail segment engages in the sale of fuel and merchandise to retail consumers. Its Wholesale segment supplies fuel to third-party dealers and consignment agents. The Fleet Fueling segment supplies fuel to proprietary and third-party cardlock, and issuance of proprietary fuel cards. Its GPMP segment supplies fuel to retail and wholesale segments. The company is based in Richmond, Virginia.