Head to Head Review: Metro (OTCMKTS:MTRAF) and Albertsons Companies (NYSE:ACI)

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

Analyst Ratings

This is a summary of recent ratings and target prices for Albertsons Companies and Metro, as provided by MarketBeat.

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

Albertsons Companies presently has a consensus price target of $13.42, indicating a potential downside of 3.58%. Given Albertsons Companies’ higher possible upside, research analysts clearly believe Albertsons Companies is more favorable than Metro.

Profitability

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

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

Dividends

Albertsons Companies pays an annual dividend of $0.68 per share and has a dividend yield of 4.9%. Metro pays an annual dividend of $1.14 per share and has a dividend yield of 1.6%. Albertsons Companies pays out -618.2% of its earnings in the form of a dividend. Metro pays out 37.5% 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 raised 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.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Albertsons Companies	$83.17 billion	0.08	$217.40 million	($0.11)	-126.50
Metro	$15.74 billion	0.94	$727.05 million	$3.04	23.45

Metro has lower revenue, but higher earnings 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.

Insider and Institutional Ownership

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

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.

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.