Critical Contrast: Whole Foods Market (NASDAQ:WFM) versus The Fresh Market (TFM)

Whole Foods Market (NASDAQ: WFM) and The Fresh Market (NASDAQ:TFM) are both retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Institutional & Insider Ownership

86.3% of Whole Foods Market shares are owned by institutional investors. 1.3% of Whole Foods Market shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Whole Foods Market and The Fresh Market’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Whole Foods Market $15.88 billion 0.84 $1.32 billion $1.22 34.20
The Fresh Market N/A N/A N/A N/A N/A

Whole Foods Market has higher revenue and earnings than The Fresh Market.

Dividends

Whole Foods Market pays an annual dividend of $0.72 per share and has a dividend yield of 1.7%. The Fresh Market does not pay a dividend. Whole Foods Market pays out 59.0% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of current recommendations and price targets for Whole Foods Market and The Fresh Market, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Whole Foods Market 3 17 3 0 2.00
The Fresh Market 0 0 0 0 N/A

Whole Foods Market currently has a consensus target price of $37.39, indicating a potential downside of 10.40%. Given Whole Foods Market’s higher probable upside, research analysts clearly believe Whole Foods Market is more favorable than The Fresh Market.

Profitability

This table compares Whole Foods Market and The Fresh Market’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Whole Foods Market 2.44% 13.26% 6.84%
The Fresh Market 4.40% 24.25% 14.96%

Summary

Whole Foods Market beats The Fresh Market on 6 of the 10 factors compared between the two stocks.

Whole Foods Market Company Profile

Whole Foods Market, Inc. is engaged in the business of natural and organic foods supermarket. The Company operates approximately 456 stores in the United States, Canada and the United Kingdom. Its stores have an average size of approximately 39,000 square feet, and are supported by its distribution centers, bake house facilities, commissary kitchens, seafood-processing facilities, a produce procurement center, and a specialty coffee and tea procurement and roasting operation, among others. It offers over 30,000 organic stock keeping units (SKUs), covering various areas of its store, including produce, packaged goods, bulk, frozen, dairy, meat, bakery, prepared foods, coffee, tea, beer, wine, cheese, nutritional supplements, vitamins, body care, pet foods and household goods. The Company’s brands include 365 Everyday Value, Allegro Coffee, Whole Foods Market, Whole Paws, and Engine 2 Plant-Strong. It also offers approximately 400 temporary exclusives.

The Fresh Market Company Profile

The Fresh Market, Inc. is a United States-based specialty grocery retailer. The Company focuses on perishable categories, which include meat, seafood, produce, deli, bakery, floral, sushi and prepared foods. Its non-perishable categories include traditional grocery, frozen and dairy products, as well as bulk, coffee and candy, and beer and wine. It is engaged in sale of items at its specialty food stores, which are located in over 30 states in the United States. It offers products, such as steaks, ground beef and whole roasts under meat department. The Company offers over 200 varieties of imported and domestic cheeses under deli department. It offers products in bulk format, such as nuts, dried fruits and snack mixes. Its floral offerings include roses, orchids and tulips. Its gift selection includes candles, and seasonal and holiday gift baskets. It offers everyday wines, wines from local vintners and its private-label wines. It offers beers from local, domestic and foreign brewers.

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