Kroger vs Target Which Should You Buy?

Kroger and Target are two of the largest retailers in the United States, with both companies experiencing steady growth in recent years. The grocery giant Kroger has a strong market presence and a focus on food and household essentials, while Target is known for its wide range of merchandise and popular private label brands. Investors looking to diversify their portfolios may be interested in comparing the performance of Kroger and Target stocks to determine which company offers the most potential for growth and stability.

Kroger or Target?

When comparing Kroger and Target, 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 Kroger and Target.

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. Kroger has a dividend yield of 1.97%, while Target has a dividend yield of 3.3%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Kroger reports a 5-year dividend growth of 15.72% year and a payout ratio of 30.36%. On the other hand, Target reports a 5-year dividend growth of 11.59% year and a payout ratio of 46.70%.

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 Kroger P/E ratio at 16.22 and Target's P/E ratio at 14.21. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Kroger P/B ratio is 3.48 while Target's P/B ratio is 4.29.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Kroger has seen a 5-year revenue growth of 0.40%, while Target's is 0.63%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Kroger's ROE at 22.38% and Target's ROE at 31.11%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $62.06 for Kroger and $133.34 for Target. Over the past year, Kroger's prices ranged from $43.54 to $63.59, with a yearly change of 46.05%. Target's prices fluctuated between $120.21 and $181.86, with a yearly change of 51.29%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.