Financial Review: Kroger (NYSE:KR) versus Andersons (NASDAQ:ANDE)

Andersons (NASDAQ:ANDE) and Kroger (NYSE:KR) are both consumer staples companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, valuation, profitability, dividends and institutional ownership.

Insider and Institutional Ownership

87.1% of Andersons shares are owned by institutional investors. Comparatively, 80.9% of Kroger shares are owned by institutional investors. 4.3% of Andersons shares are owned by insiders. Comparatively, 0.4% of Kroger shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Andersons and Kroger’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Andersons	1.62%	16.23%	5.84%
Kroger	0.71%	44.33%	6.20%

Dividends

Andersons pays an annual dividend of $0.80 per share and has a dividend yield of 1.1%. Kroger pays an annual dividend of $1.56 per share and has a dividend yield of 2.7%. Andersons pays out 15.4% of its earnings in the form of a dividend. Kroger pays out 91.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Andersons has increased its dividend for 28 consecutive years and Kroger has increased its dividend for 19 consecutive years.

Analyst Ratings

This is a summary of current ratings for Andersons and Kroger, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Andersons	0	1	3	1	3.00
Kroger	0	9	10	0	2.53

Andersons currently has a consensus price target of $95.00, suggesting a potential upside of 33.86%. Kroger has a consensus price target of $71.31, suggesting a potential upside of 21.90%. Given Andersons’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Andersons is more favorable than Kroger.

Risk & Volatility

Andersons has a beta of 0.63, indicating that its stock price is 37% less volatile than the S&P 500. Comparatively, Kroger has a beta of 0.41, indicating that its stock price is 59% less volatile than the S&P 500.

Earnings and Valuation

This table compares Andersons and Kroger”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Andersons	$11.01 billion	0.22	$95.71 million	$5.18	13.70
Kroger	$147.64 billion	0.24	$1.02 billion	$1.70	34.41

Kroger has higher revenue and earnings than Andersons. Andersons is trading at a lower price-to-earnings ratio than Kroger, indicating that it is currently the more affordable of the two stocks.

Summary

Andersons beats Kroger on 10 of the 18 factors compared between the two stocks.

About Andersons

The Andersons, Inc. operates in trade, renewables, and nutrient and industrial sectors in the United States, Canada, Mexico, Egypt, Switzerland, and internationally. It operates through three segments: Trade, Renewables, and Nutrient & Industrial. The company’s Trade segment operates grain elevators; stores commodities; and provides grain marketing, risk management, and origination services, as well as sells commodities, such as corn, soybeans, wheat, oats, ethanol, and corn oil. This segment also engages in the commodity merchandising business, as well as offers logistics for physical commodities, such as whole grains, grain products, feed ingredients, domestic fuel products, and other agricultural commodities. Its Renewables segment produces, purchases, and sells ethanol, and co-products, as well as offers facility operations, risk management, and marketing services to the ethanol plants it invests in and operates. The company’s Nutrient & Industrial segment manufactures, distributes, and retails agricultural and related plant nutrients, liquid industrial products, corncob-based products, and pelleted lime and gypsum products, as well as turf fertilizer, pesticide, and herbicide products; and crop nutrients, crop protection chemicals, and seed products, as well as provides application and agronomic services to commercial and family farmers. In addition, this segment produces corncob-based products for laboratory animal bedding and private-label cat litter, as well as absorbents, blast cleaners, carriers, and polishers; professional lawn care products for golf course and turf care markets; fertilizer and weed, and pest control products; dry and liquid agricultural nutrients, pelleted lime, gypsum, and soil amendments; and micronutrients, as well as industrial products comprising nitrogen reagents, calcium nitrate, deicers, and dust abatement products. The Andersons, Inc. was founded in 1947 and is based in Maumee, Ohio.

About Kroger

The Kroger Co. operates as a food and drug retailer in the United States. The company operates combination food and drug stores, multi-department stores, marketplace stores, and price impact warehouses. Its combination food and drug stores offer natural food and organic sections, pharmacies, general merchandise, pet centers, fresh seafood, and organic produce; and multi-department stores provide apparel, home fashion and furnishings, outdoor living, electronics, automotive products, and toys. The company’s marketplace stores offer full-service grocery, pharmacy, health and beauty care, and perishable goods, as well as general merchandise, including apparel, home goods, and toys; and price impact warehouse stores provide grocery, and health and beauty care items, as well as meat, dairy, baked goods, and fresh produce items. It also manufactures and processes food products for sale in its supermarkets and online; and sells fuel through fuel centers. The Kroger Co. was founded in 1883 and is based in Cincinnati, Ohio.