Critical Contrast: Axfood AB (publ) (OTCMKTS:AXFOY) versus Woolworths Group (OTCMKTS:WOLWF)

Woolworths Group (OTCMKTS:WOLWF) and Axfood AB (publ) (OTCMKTS:AXFOY) are both consumer defensive companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, valuation, profitability, risk and dividends.

Institutional & Insider Ownership

14.5% of Woolworths Group shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings for Woolworths Group and Axfood AB (publ), as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Woolworths Group	0	1	1	0	2.50
Axfood AB (publ)	0	0	0	0	0.00

Woolworths Group currently has a consensus target price of $34.00, indicating a potential upside of 62.37%. Given Woolworths Group’s stronger consensus rating and higher possible upside, equities analysts plainly believe Woolworths Group is more favorable than Axfood AB (publ).

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Woolworths Group	N/A	N/A	N/A
Axfood AB (publ)	N/A	N/A	N/A

Valuation & Earnings

This table compares Woolworths Group and Axfood AB (publ)”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Woolworths Group	N/A	N/A	N/A	$1.96	10.71
Axfood AB (publ)	N/A	N/A	N/A	$10.22	2.67

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

Dividends

Woolworths Group pays an annual dividend of $1.36 per share and has a dividend yield of 6.5%. Axfood AB (publ) pays an annual dividend of $4.91 per share and has a dividend yield of 18.0%. Woolworths Group pays out 69.5% of its earnings in the form of a dividend. Axfood AB (publ) 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. Axfood AB (publ) is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Woolworths Group beats Axfood AB (publ) on 5 of the 8 factors compared between the two stocks.

About Woolworths Group

Woolworths Group Limited operates retail stores in Australia and New Zealand. It operates through Australian Food, Australian B2B, New Zealand Food, BIG W, and Other segments. The Australian Food segment procures and resells food and related products, and provides services to customers in Australia. The Australian B2B segment engages in procurement and distribution of food and related products for resale to other businesses, as well as provision of supply chain services to business customers in Australia. The New Zealand Food segment is involved in the procurement and resale of food and drinks, and provides services to retail customers in New Zealand. BIG W segment procures and resells discount general merchandise products to customers in Australia. The Other segment operates Quantium and MyDeal retail stores The company was formerly known as Woolworths Limited and changed its name to Woolworths Group Limited in December 2017. Woolworths Group Limited was incorporated in 1924 and is based in Bella Vista, Australia.

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.