Coles vs Woolworths Which Performs Better?

Coles and Woolworths are two of the largest retail chains in Australia, dominating the grocery market. Both companies have a strong presence in the stock market, with their shares being closely watched by investors. Coles has been traditionally known for its strong focus on groceries, while Woolworths has diversified its offerings to include liquor, electronics, and apparel. Market analysts often compare the performance of Coles and Woolworths stocks to assess the health of the retail sector in Australia.

Coles or Woolworths?

When comparing Coles and Woolworths, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Coles and Woolworths.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Coles has a dividend yield of 3.86%, while Woolworths has a dividend yield of 4.25%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Coles reports a 5-year dividend growth of 0.00% year and a payout ratio of 76.30%. On the other hand, Woolworths reports a 5-year dividend growth of 0.00% year and a payout ratio of -520.71%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Coles P/E ratio at 20.92 and Woolworths's P/E ratio at -142.78. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Coles P/B ratio is 6.46 while Woolworths's P/B ratio is 7.45.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Coles has seen a 5-year revenue growth of 0.04%, while Woolworths's is 0.21%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Coles's ROE at 31.26% and Woolworths's ROE at -5.38%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are A$17.61 for Coles and $21.10 for Woolworths. Over the past year, Coles's prices ranged from A$15.06 to A$19.40, with a yearly change of 28.82%. Woolworths's prices fluctuated between $19.62 and $25.26, with a yearly change of 28.75%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.