Reviewing Loblaw Companies (OTCMKTS:LBLCF) & Metro (OTCMKTS:MTRAF)

Loblaw Companies (OTCMKTS:LBLCF) and Metro (OTCMKTS:MTRAF) are both large-cap consumer defensive companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Loblaw Companies	4.13%	25.38%	7.04%
Metro	4.44%	14.73%	7.20%

Dividends

Loblaw Companies pays an annual dividend of $0.41 per share and has a dividend yield of 0.9%. Metro pays an annual dividend of $1.19 per share and has a dividend yield of 1.8%. Loblaw Companies pays out 43.2% of its earnings in the form of a dividend. Metro pays out 72.1% 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.

Analyst Ratings

This is a breakdown of current ratings and target prices for Loblaw Companies and Metro, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Loblaw Companies	0	0	0	0	0.00
Metro	0	1	3	0	2.75

Earnings and Valuation

This table compares Loblaw Companies and Metro”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Loblaw Companies	$45.73 billion	1.15	$1.91 billion	$0.95	47.37
Metro	$15.74 billion	0.91	$727.05 million	$1.65	40.98

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

Metro Inc., through its subsidiaries, operates as a retailer, franchisor, distributor, and manufacturer in the food and pharmaceutical sectors in Canada. The company operates supermarkets, discount, neighborhood, and specialty stores that provide fresh and grocery products, baked goods, prepared food products, meats, dairy products, fruits and vegetables, frozen food products, bakery products, delicatessen items, and pastries. It also manufactures ready-to-eat meals, salads, dips, pastries, pies, breads, and cakes; generic drugs under Pro Doc trademark; and provides online grocery shopping services. In addition, the company offers its private label food products under Irresistibles, Selection, Our Harvest Best, Lucky Koi, Life Smart, Adonis, Phoenicia, and Premiere Moisson brands; and private label drug products comprising beauty and cosmetic products, over-the-counter medications, and personal care products, sold under the Personnelle brand name. It operates a network of food stores under various banners, including Metro, Metro Plus, Adonis, Super C, Marché Richelieu, Marché Ami, Première Moisson, Les 5 Saisons, and Food Basics, as well as drugstores primarily under the PJC Jean Coutu, PJC Santé, PJC Santé Beauté, Brunet, Brunet Plus, Brunet Clinique, Clini Plus, Metro Pharmacy, and Food Basics Pharmacy banners. The company was founded in 1947 and is headquartered in Montréal, Canada.