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Category: Walmart (WMT) and Kroger (KR)
Date: 25 June 2020 Stock price of Walmart: $120.30 Stock price of Kroger: $32.82 So battle of the massive general retailers stocks. We compare the stock of Walmart (WMT) against Kroger (KR). Who comes out in type in terms of stock price performance over the last couple of years and who has the best future prospects.
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All things considered, considering their size and the fact that they have greater buying and bargaining power, and a stronger balance sheet, in this closely contested battle of the retailers, if we have to pick between Kroger and Walmart right now, we would go for Walmart."
More About Walmart (WMT)
Walmart Inc. ("Walmart," the "Company" or "we") helps people around the world save money and live better – anytime and anywhere – by providing the opportunity to shop in retail stores and through eCommerce. Through innovation, we strive to continuously improve a customer-centric experience that seamlessly integrates our eCommerce and retail stores in an omnichannel offering that saves time for our customers. Each week, we serve over 265 million customers who visit approximately 11,500 stores and numerous eCommerce websites under 56 banners in 27 countries. Our strategy is to make every day easier for busy families, operate with discipline, sharpen our culture and become digital, and make trust a competitive advantage. Making life easier for busy families includes our commitment to price leadership, which has been and will remain a cornerstone of our business, as well as increasing convenience to save our customers time. By leading on price, we earn the trust of our customers every day by providing a broad assortment of quality merchandise and services at everyday low prices ("EDLP"). EDLP is our pricing philosophy under which we price items at a low price every day so our customers trust that our prices will not change under frequent promotional activity. Everyday low cost ("EDLC") is our commitment to control expenses so our cost savings can be passed along to our customers. Our operations comprise three reportable segments: Walmart U.S., Walmart International and Sam's Club
Quick facts about Walmart (WMT):
Quick facts about Walmart (WMT):
- Walmart is listed on the New York Stock Exchange (NYSE) under share code ticker: WMT
- Walmart market capital: $347 billion
- Revenues of $524 billion for 2020 fiscal year
- Earnings per share: $5.19
- Dividends per share: $2.12
- Cash and equivalents on their balance sheet: $9.465 billion
- Stockholders equity : $74.3 billion
- Stockholders equity per share: $26.07
- Price to stockholders equity ratio: 4.7
- Walmart has 2.2 million employees world wide
- Walmart has 1.5 million employees in the U.S
- Walmart has 11 501 retail outlets across the globe
- Walmart has 4 756 Walmart branded stores in the .S
- Walmart has 599 Sam's Club stores in the U.S
More About Kroger Company (KR)
The Kroger Co. was founded in 1883 and incorporated in 1902. As of February 1, 2020, Kroger is one of the world’s largest retailers, as measured by revenue, operating 2,757 supermarkets under a variety of local banner names in 35 states and the District of Columbia. Of these stores, 2,270 have pharmacies and 1,567 have fuel centers. We offer Pickup (also referred to as ClickList®) and Harris Teeter ExpressLane™ — personalized, order online, pick up at the store services — at 1,989 of our supermarkets and provide home delivery service to 97% of Kroger households. We also operate an online retailer. We operate 35 food production plants, primarily bakeries and dairies, which supply approximately 31% of Our Brands units and 42% of the grocery category Our Brands units sold in our supermarkets; the remaining Our Brands items are produced to our strict specifications by outside manufacturers. Our revenues are predominately earned and cash is generated as consumer products are sold to customers in our stores, fuel centers and via our online platforms. We earn income predominately by selling products at price levels that produce revenues in excess of the costs we incur to make these products available to our customers. Such costs include procurement and distribution costs, facility occupancy and operational costs, and overhead expenses. Our retail operations, which represent 97% of our consolidated sales, is our only reportable segment.
Quick facts about Kroger Company (KR)
Quick facts about Kroger Company (KR)
- Kroger Company is listed on the New York Stock Exchange under share code ticker: KR
- Number of employees of Kroger Company: 435 000
- Number of Kroger Company stores: 2 757
- 2270 of the stores had pharmacies
- 1567 had fuel centres
- Revenue of Kroger in 2019: $122.2 billion
- Earnings per Kroger share in 2019: $2.04
- Shares in issue: 805 million
- Cash on balance sheet: $399 million
- Stockholders equity in Kroger Company: $8.573 billion
- Stockholders equity per share in Kroger: $10.64
- Price to stockholders equity ratio: 3.11
Walmart (WMT) stock vs Kroger (KR) stock
The image below shows the stock price performance of Walmart (WMT) and Kroger (KR) over the last 3 years. And while they are both active in the general retailing space their stock price movements are totally different. Kroger's stock seems to have had a few more significant pull backs than that of Walmart over the last 3 years. Over the three year period the stock of Walmart has increased by 64.28% while the stock of Kroger increased by 45.16% over the same time period.
So which of these massive retailers stock offers the best value for long term investors at their current price? Kroger because its stock has run up as far as that of Walmart over the last 3 years. Or Walmart as it has a far greater customer base and is about 3 times the size of Kroger based on their revenue in 2019?
Walmart is trading at 4.7 times its stockholders equity per share, while Kroger (KR) is trading at 3.11 times its stockholders equity per share. The lower this ratio the more value the group offers. Most firms tend to trade between 2 and times its stockholders equity per share. For some perspective the average price to book value of firms in the S&P500 is 3.7
Kroger is trading at a PE ratio of 16.1 while Walmart is trading at a PE ratio of 20.1. Kroger has about $0.50 per share in cash on their balance sheet while Walmart has $3.38. So from a cash flow and balance sheet perspective one can argue that Walmart is better placed.
All things considered, considering their size and the fact that they have greater buying and bargaining power, and a stronger balance sheet, in this closely contested battle of the retailers, if we have to pick between Kroger and Walmart right now, we would go for Walmart.
Walmart is trading at 4.7 times its stockholders equity per share, while Kroger (KR) is trading at 3.11 times its stockholders equity per share. The lower this ratio the more value the group offers. Most firms tend to trade between 2 and times its stockholders equity per share. For some perspective the average price to book value of firms in the S&P500 is 3.7
Kroger is trading at a PE ratio of 16.1 while Walmart is trading at a PE ratio of 20.1. Kroger has about $0.50 per share in cash on their balance sheet while Walmart has $3.38. So from a cash flow and balance sheet perspective one can argue that Walmart is better placed.
All things considered, considering their size and the fact that they have greater buying and bargaining power, and a stronger balance sheet, in this closely contested battle of the retailers, if we have to pick between Kroger and Walmart right now, we would go for Walmart.