Weis Markets (NYSE: WMK) and DavidsTea (NASDAQ:DTEA) are both small-cap retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, dividends, earnings, profitability and risk.

Dividends

Weis Markets pays an annual dividend of $1.20 per share and has a dividend yield of 3.0%. DavidsTea does not pay a dividend. Weis Markets pays out 42.7% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Weis Markets and DavidsTea’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Weis Markets $3.14 billion 0.35 $87.16 million $2.81 14.34
DavidsTea $164.02 million 0.61 -$4.83 million ($0.32) -12.03

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

Analyst Ratings

This is a breakdown of recent recommendations for Weis Markets and DavidsTea, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Weis Markets 0 0 0 0 N/A
DavidsTea 0 2 0 0 2.00

DavidsTea has a consensus price target of $6.00, suggesting a potential upside of 55.84%. Given DavidsTea’s higher probable upside, analysts clearly believe DavidsTea is more favorable than Weis Markets.

Insider and Institutional Ownership

31.9% of Weis Markets shares are owned by institutional investors. Comparatively, 11.7% of DavidsTea shares are owned by institutional investors. 26.9% of Weis Markets shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Weis Markets and DavidsTea’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Weis Markets 2.16% 8.13% 5.39%
DavidsTea -4.79% N/A N/A

Summary

Weis Markets beats DavidsTea on 10 of the 13 factors compared between the two stocks.

About Weis Markets

Weis Markets, Inc. is engaged principally in the retail sale of food in Pennsylvania and surrounding states. The Company’s retail food stores sell groceries, dairy products, frozen foods, meats, seafood, fresh produce, floral, pharmacy services, deli products, prepared foods, bakery products, beer and wine, fuel and general merchandise items, such as health and beauty care and household products. As of December 31, 2016, it had owned and operated approximately 204 retail food stores. The majority of the Company’s stores are concentrated in central and northeast Pennsylvania, central Maryland, suburban Washington, District of Columbia and Baltimore regions and New York’s Southern Tier. As of December 31, 2016, it had operated four stores in Delaware, 50 stores in Maryland, five stores in New Jersey, nine stores in New York, 121 stores in Pennsylvania, 13 stores in Virginia and two stores in West Virginia, for a total of 204 retail food stores operating under the Weis Markets name.

About DavidsTea

DAVIDsTEA Inc. is engaged in the retail and online sale of tea, tea accessories, and food and beverages in Canada and in the United States. The Company’s segments include Canada and the U.S. The Company is a branded retailer of specialty tea, offering approximately 150 loose-leaf teas, pre-packaged teas, tea sachets and tea-related gifts, accessories, and food and beverages primarily through approximately 190 DAVIDsTEA stores, which are operated by the Company, and its Website, davidstea.com. Additionally, the Company offers on-the-go tea beverages in its retail stores. The Company’s tea accessories include tea mugs, travel mugs, teacup sets, teapots, tea makers, kettles, infusers, filters, frothers, tins and spoons. The Company offers beverages range from the standard hot or iced tea to its Tea Lattes. The Company’s different flavors of loose-leaf tea span eight tea categories: white, green, oolong, black, pu’erh, mate, rooibos and herbal tea.

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