Critical Review: Ingles Markets (NASDAQ:IMKTA) versus Seven & i (OTC:SVNDF)

Seven & i (OTC:SVNDF) and Ingles Markets (NASDAQ:IMKTA) are both consumer defensive companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, risk, valuation, dividends, earnings, profitability and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Seven & i and Ingles Markets, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Seven & i	0	1	0	0	2.00
Ingles Markets	0	0	0	0	0.00

Dividends

Seven & i pays an annual dividend of $57.09 per share and has a dividend yield of 349.3%. Ingles Markets pays an annual dividend of $0.66 per share and has a dividend yield of 1.0%. Seven & i pays out 28.8% of its earnings in the form of a dividend. Ingles Markets pays out 11.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Institutional & Insider Ownership

19.6% of Seven & i shares are owned by institutional investors. Comparatively, 62.5% of Ingles Markets shares are owned by institutional investors. 22.8% of Ingles Markets shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Seven & i and Ingles Markets’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Seven & i	N/A	N/A	N/A
Ingles Markets	1.87%	6.90%	4.21%

Valuation & Earnings

This table compares Seven & i and Ingles Markets”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Seven & i	N/A	N/A	N/A	$197.96	0.08
Ingles Markets	$5.64 billion	0.22	$105.54 million	$5.55	11.93

Ingles Markets has higher revenue and earnings than Seven & i. Seven & i is trading at a lower price-to-earnings ratio than Ingles Markets, indicating that it is currently the more affordable of the two stocks.

Summary

Ingles Markets beats Seven & i on 8 of the 11 factors compared between the two stocks.

About Seven & i

Seven & i Holdings Co., Ltd. operates convenience stores, superstores, department stores, supermarkets, and specialty stores. It operates through six segments: Domestic Convenience Store operations, Overseas Convenience Store Operations, Superstore Operations, Department and Specialty Store Operations, Financial Services, and Others. The company engages in the operation of convenience stores comprising directly managed corporate stores and franchised stores; retail business that provides daily life necessities, such as food and other daily necessities and dollar merchandise and services; banking, leasing, and credit card business; and real estate business. Seven & i Holdings Co., Ltd. was incorporated in 2005 and is headquartered in Tokyo, Japan.

About Ingles Markets

Ingles Markets, Incorporated, together with its subsidiaries, operates a chain of supermarkets in the southeast United States. It offers food products, including grocery, meat and dairy products, produce, frozen foods, and other perishables; and non-food products, which include fuel centers, pharmacies, health and beauty care products, and general merchandise, as well as private label items. The company owns and operates a milk processing and packaging plant that supplies organic milk, fruit juices, and bottled water products to other retailers, food service distributors, and grocery warehouses. In addition, it provides home meal replacement items, delicatessens, bakeries, floral departments, and greeting cards, as well as broad selections of local organic, beverage, and health-related items. The company operates under the Ingles and Sav-Mor brand names. Ingles Markets, Incorporated was founded in 1963 and is headquartered in Asheville, North Carolina.