Analyzing Albertsons Companies (NYSE:ACI) and Metro (OTCMKTS:MTRAF)

Metro (OTCMKTS:MTRAF) and Albertsons Companies (NYSE:ACI) are both consumer staples companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, valuation, institutional ownership, dividends, risk and analyst recommendations.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Metro	4.01%	14.24%	6.80%
Albertsons Companies	-0.06%	52.17%	3.57%

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Metro	$15.74 billion	0.94	$727.05 million	$3.04	23.40
Albertsons Companies	$83.17 billion	0.08	$217.40 million	($0.11)	-125.56

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

Institutional and Insider Ownership

71.3% of Albertsons Companies shares are held by institutional investors. 1.2% of Albertsons Companies shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Metro and Albertsons Companies, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Metro	0	1	3	0	2.75
Albertsons Companies	4	10	2	0	1.88

Albertsons Companies has a consensus price target of $13.42, suggesting a potential downside of 2.86%. Given Albertsons Companies’ higher probable upside, analysts plainly believe Albertsons Companies is more favorable than Metro.

Dividends

Metro pays an annual dividend of $1.14 per share and has a dividend yield of 1.6%. Albertsons Companies pays an annual dividend of $0.68 per share and has a dividend yield of 4.9%. Metro pays out 37.5% of its earnings in the form of a dividend. Albertsons Companies pays out -618.2% 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. Albertsons Companies has increased its dividend for 1 consecutive years. Albertsons Companies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

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.

About Albertsons Companies

Albertsons Companies, Inc., through its subsidiaries, engages in the operation of food and drug stores in the United States. The company’s food and drug retail stores offer grocery products, general merchandise, health and beauty care products, pharmacy, fuel, and other items and services. It also manufactures and processes food products for sale in stores. It operates stores under various banners, including Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Jewel-Osco, Acme, Shaw’s, Star Market, United Supermarkets, Market Street, Haggen, Kings Food Markets, and Balducci’s Food Lovers Market; and pharmacies, in-store branded coffee shops, adjacent fuel centers, distribution centers, and manufacturing facilities, as well as various digital platforms. Albertsons Companies, Inc. was founded in 1860 and is headquartered in Boise, Idaho. Albertsons Companies, Inc. operates as a subsidiary of Albertsons Investor Holdings LLC.