Shoprite (SRGHY) versus Its Competitors Critical Review

Earnings & Valuation

This table compares Shoprite and its rivals gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Shoprite	N/A	N/A	2.85
Shoprite Competitors	$22.27 billion	$1.70 billion	-219.76

Shoprite’s rivals have higher revenue and earnings than Shoprite. Shoprite is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Shoprite and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shoprite	N/A	N/A	N/A
Shoprite Competitors	-3.46%	-37.81%	-2.62%

Dividends

Shoprite pays an annual dividend of $4.22 per share and has a dividend yield of 21.2%. Shoprite pays out 60.5% of its earnings in the form of a dividend. As a group, “Broadline Retail” companies pay a dividend yield of 32.6% and pay out 11.5% of their earnings in the form of a dividend. Shoprite lags its rivals as a dividend stock, given its lower dividend yield and higher payout ratio.

Institutional and Insider Ownership

0.0% of Shoprite shares are held by institutional investors. Comparatively, 44.1% of shares of all “Broadline Retail” companies are held by institutional investors. 23.8% of shares of all “Broadline Retail” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Shoprite rivals beat Shoprite on 5 of the 9 factors compared.

About Shoprite

Shoprite Holdings Ltd, an investment holding company, primarily engages in the food retailing business in South Africa and internationally. The company operates through four segments: Supermarkets RSA, Supermarkets Non-RSA, Furniture, and Other Operating segments. It also offers clothing, general merchandise, cosmetics, and liquor products; furniture and home entertainment products; and electrical and household appliances. In addition, the company distributes various pharmaceutical products and surgical equipment to pharmacies, hospitals, clinics, dispensing doctors, and veterinary surgeons. It operates stores under the Shoprite, Checkers, Checkers Hyper, Usave, Checkers Foods, OK Furniture, OK Power Express, House & Home, Shoprite LiquorShop, OK, Checkers LiquorShop, MediRite, Sentra, Megasave, OK Liquor, UNIQ, Petshop Science, Checkers Outdoor, Transpharm, Checkers Little Me, K'nect, Computicket, and Checkers Sixty60 brands. The company also operates franchise stores. Further, the company provides ticketing, and car rental and accommodation services; stadium management, capacity management, travel management, and access control solutions; and credit financing, financial, and treasury management services. Additionally, it invests in properties; and sells products to franchisees under drop-shipment arrangements. Shoprite Holdings Ltd was incorporated in 1936 and is based in Brackenfell, South Africa.