Financial Review: United Natural Foods (NYSE:UNFI) vs. Grocery Outlet (NASDAQ:GO)

United Natural Foods (NYSE:UNFI) and Grocery Outlet (NASDAQ:GO) are both consumer staples companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, risk, dividends, earnings, institutional ownership, analyst recommendations and valuation.

Earnings & Valuation

This table compares United Natural Foods and Grocery Outlet”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Natural Foods	$31.78 billion	0.08	-$118.00 million	($0.66)	-66.27
Grocery Outlet	$4.69 billion	0.26	-$224.91 million	($3.87)	-3.20

United Natural Foods has higher revenue and earnings than Grocery Outlet. United Natural Foods is trading at a lower price-to-earnings ratio than Grocery Outlet, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

United Natural Foods has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500. Comparatively, Grocery Outlet has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500.

Profitability

This table compares United Natural Foods and Grocery Outlet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Natural Foods	-0.12%	7.42%	1.57%
Grocery Outlet	-8.04%	5.84%	1.79%

Insider & Institutional Ownership

87.6% of United Natural Foods shares are held by institutional investors. Comparatively, 99.9% of Grocery Outlet shares are held by institutional investors. 2.4% of United Natural Foods shares are held by insiders. Comparatively, 5.6% of Grocery Outlet shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations and price targets for United Natural Foods and Grocery Outlet, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Natural Foods	1	6	2	0	2.11
Grocery Outlet	2	12	0	0	1.86

United Natural Foods currently has a consensus target price of $47.86, suggesting a potential upside of 9.41%. Grocery Outlet has a consensus target price of $10.59, suggesting a potential downside of 14.45%. Given United Natural Foods’ stronger consensus rating and higher possible upside, research analysts plainly believe United Natural Foods is more favorable than Grocery Outlet.

Summary

United Natural Foods beats Grocery Outlet on 9 of the 14 factors compared between the two stocks.

About United Natural Foods

United Natural Foods, Inc., together with its subsidiaries, distributes natural, organic, specialty, produce, and conventional grocery and non-food products in the United States and Canada. It operates in two segments, Wholesale and Retail. The company offers grocery and general merchandise, produce, perishables and frozen foods, wellness and personal care items, and bulk and foodservice products. It also provides nuts, dried fruit, seeds, trail mixes, granola, natural and organic snack items, and confections under the Woodstock Farms Manufacturing name; organic, non-GMO project verified, and specialty food and non-food items under the Blue Marble brand name; pet food under the WILD HARVEST brand name; and various products under the ESSENTIAL EVERYDAY, SHOPPERS VALUE, Field Day, EQUALINE, CULINARY CIRCLE, and STONE RIDGE CREAMERY brand names. In addition, the company provides home, health and beauty care, and pharmacy products, as well as private label products through a network of Cub Foods and Shoppers retail grocery stores; and retail store support, pricing strategy, shelf and planogram management, advertising, couponing, ecommerce, consumer convenience, store design, equipment sourcing, electronic payments processing, network and data hosting, point-of-sale hardware and software, automation tools, sustainability, and administrative back-office solution services. Further, it offers consumer and trade marketing programs, and programs to support suppliers in understanding its markets. The company serves chains, independent retailers, and supernatural chains, as well as foodservice, ecommerce, conventional military business, and other sales customers. United Natural Foods, Inc. was founded in 1976 and is headquartered in Providence, Rhode Island.

About Grocery Outlet

Grocery Outlet Holding Corp. operates as a retailer of consumables and fresh products sold through independently operated stores in the United States. Its stores offer products in various categories, such as dairy and deli, produce, floral, fresh meat, seafood products, grocery, general merchandise, health and beauty care, frozen food, beer and wine, and ethnic products. The company was founded in 1946 and is headquartered in Emeryville, California.