Kroger vs Walmart Which Outperforms?

Kroger and Walmart are two of the biggest retailers in the United States, with both companies offering investors the opportunity to profit from the consumer goods market. Kroger, as a grocery store chain, has traditionally focused on food and household essentials, while Walmart is a diversified retail giant with a wide range of products and services. Despite their differences, both companies have seen fluctuations in their stock prices due to changing economic conditions and consumer preferences. Investors can evaluate the performance and prospects of Kroger and Walmart stocks to make informed decisions about their investment portfolios.

Kroger or Walmart?

When comparing Kroger and Walmart, 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 Walmart.

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 2.0%, while Walmart has a dividend yield of 0.96%. 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 30.05%. On the other hand, Walmart reports a 5-year dividend growth of 1.85% year and a payout ratio of 41.18%.

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 15.42 and Walmart's P/E ratio at 43.56. 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 3.44 while Walmart's P/B ratio is 8.02.

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 Walmart's is 0.34%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Kroger's ROE at 23.42% and Walmart's ROE at 18.91%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $59.47 for Kroger and $84.12 for Walmart. Over the past year, Kroger's prices ranged from $42.10 to $60.34, with a yearly change of 43.34%. Walmart's prices fluctuated between $49.85 and $85.54, with a yearly change of 71.61%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.