Contrasting Ingles Markets (NASDAQ:IMKTA) and Dollar Tree (NASDAQ:DLTR)

Dollar Tree (NASDAQ:DLTR) and Ingles Markets (NASDAQ:IMKTA) are both consumer staples companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, earnings, risk, valuation, institutional ownership, dividends and analyst recommendations.

Earnings & Valuation

This table compares Dollar Tree and Ingles Markets”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dollar Tree	$20.07 billion	1.06	$1.28 billion	$8.19	13.82
Ingles Markets	$5.33 billion	0.30	$83.59 million	$5.47	15.19

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

Profitability

This table compares Dollar Tree and Ingles Markets’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dollar Tree	8.03%	38.61%	9.94%
Ingles Markets	1.92%	6.30%	4.01%

Insider and Institutional Ownership

97.4% of Dollar Tree shares are held by institutional investors. Comparatively, 62.5% of Ingles Markets shares are held by institutional investors. 7.1% of Dollar Tree shares are held by company insiders. Comparatively, 22.8% of Ingles Markets shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Dollar Tree and Ingles Markets, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dollar Tree	2	12	11	0	2.36
Ingles Markets	0	0	1	0	3.00

Dollar Tree presently has a consensus target price of $131.68, indicating a potential upside of 16.37%. Given Dollar Tree’s higher possible upside, equities research analysts plainly believe Dollar Tree is more favorable than Ingles Markets.

Volatility & Risk

Dollar Tree has a beta of 0.66, indicating that its share price is 34% less volatile than the S&P 500. Comparatively, Ingles Markets has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500.

Summary

Dollar Tree beats Ingles Markets on 11 of the 14 factors compared between the two stocks.

About Dollar Tree

Dollar Tree, Inc. operates retail discount stores. The company operates in two segments, Dollar Tree and Family Dollar. The Dollar Tree segment offers merchandise at the fixed price of $ 1.25. It provides consumable merchandise, which includes everyday consumables, such as household paper and chemicals, food, candy, health, personal care products, and frozen and refrigerated food; variety merchandise comprising toys, durable housewares, gifts, stationery, party goods, greeting cards, softlines, arts and crafts supplies, and other items; and seasonal goods that include Christmas, Easter, Halloween, and Valentine's Day merchandise. It operates stores under the Dollar Tree and Dollar Tree Canada brands, as well as distribution centers in the United States and Canada. The Family Dollar segment operates general merchandise retail discount stores that offer consumable merchandise, which comprise food and beverages, tobacco, health and personal care, household chemicals, paper products, hardware and automotive supplies, diapers, batteries, and pet food and supplies; and home products, including housewares, home décor, and giftware, as well as domestics, such as comforters, sheets, and towels. It also provides apparel and accessories merchandise comprising clothing, fashion accessories, and shoes; and seasonal and electronics merchandise that include Christmas, Easter, Halloween, and Valentine's Day merchandise, as well as personal electronics, which comprise pre-paid cellular phones and services, stationery and school supplies, and toys. Dollar Tree, Inc. was founded in 1986 and is based in Chesapeake, Virginia.

About Ingles Markets

Ingles Markets, Incorporated, together with its subsidiaries, operates a chain of supermarkets in the southeast United States. It offers food products, including grocery, meat and dairy products, produce, frozen foods, and other perishables; and non-food products, which include fuel centers, pharmacies, health and beauty care products, and general merchandise, as well as private label items. The company owns and operates a milk processing and packaging plant that supplies organic milk, fruit juices, and bottled water products to other retailers, food service distributors, and grocery warehouses. In addition, it provides home meal replacement items, delicatessens, bakeries, floral departments, and greeting cards, as well as broad selections of local organic, beverage, and health-related items. The company operates under the Ingles and Sav-Mor brand names. Ingles Markets, Incorporated was founded in 1963 and is headquartered in Asheville, North Carolina.