Head-To-Head Contrast: Dollar General (NYSE:DG) vs. Village Super Market (NASDAQ:VLGEA)

Dollar General (NYSE:DG) and Village Super Market (NASDAQ:VLGEA) are both consumer staples companies, but which is the better business? We will compare the two companies based on the strength of their risk, valuation, institutional ownership, earnings, analyst recommendations, dividends and profitability.

Analyst Recommendations

This is a summary of current ratings and target prices for Dollar General and Village Super Market, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dollar General	1	15	13	0	2.41
Village Super Market	0	0	1	0	3.00

Dollar General currently has a consensus price target of $137.96, suggesting a potential upside of 2.91%. Given Dollar General’s higher possible upside, analysts plainly believe Dollar General is more favorable than Village Super Market.

Volatility and Risk

Dollar General has a beta of 0.19, suggesting that its share price is 81% less volatile than the S&P 500. Comparatively, Village Super Market has a beta of 0.45, suggesting that its share price is 55% less volatile than the S&P 500.

Profitability

This table compares Dollar General and Village Super Market’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dollar General	3.90%	18.93%	5.21%
Village Super Market	2.18%	10.23%	5.17%

Institutional & Insider Ownership

91.8% of Dollar General shares are held by institutional investors. Comparatively, 39.0% of Village Super Market shares are held by institutional investors. 0.6% of Dollar General shares are held by company insiders. Comparatively, 59.0% of Village Super Market shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Dollar General pays an annual dividend of $2.36 per share and has a dividend yield of 1.8%. Village Super Market pays an annual dividend of $1.00 per share and has a dividend yield of 2.4%. Dollar General pays out 30.7% of its earnings in the form of a dividend. Village Super Market pays out 28.2% 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. Village Super Market is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Dollar General and Village Super Market”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dollar General	$42.72 billion	0.69	$1.51 billion	$7.69	17.43
Village Super Market	$2.41 billion	0.26	$52.46 million	$3.55	11.91

Dollar General has higher revenue and earnings than Village Super Market. Village Super Market is trading at a lower price-to-earnings ratio than Dollar General, indicating that it is currently the more affordable of the two stocks.

Summary

Dollar General beats Village Super Market on 11 of the 16 factors compared between the two stocks.

About Dollar General

Dollar General Corporation is an American discount retailer that operates neighborhood stores offering everyday essentials at value-oriented prices. Its merchandise includes food and household supplies, cleaning products, health and beauty items, seasonal goods, apparel, and home products, with a mix of national brands and private-label products. The company traces its roots to J.L. Turner & Son, a family-owned business established in 1939. The first store operating under the Dollar General name opened in Springfield, Kentucky, in 1955.

About Village Super Market

Village Super Market, Inc. operates grocery stores, primarily under the ShopRite banner. Its supermarkets offer a broad range of food and household products, including fresh produce, meat, seafood, bakery and deli items, as well as prepared foods and other services. The company also operates specialty food stores under the Gourmet Garage name. Its stores serve communities in New Jersey, New York, Maryland and Pennsylvania, with Gourmet Garage locations in New York City. Village Super Market’s roots trace back to 1937, when the Sumas family began its grocery business.