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Comparing Supervalu’s Stock Market Performance to Its Peers

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Stock market performance

Supervalu (SVU) has been among the worst-performing supermarket players in the stock market this year. The company has lost 13.4% year-to-date as of April 20, 2016, after losing around 30% of its value in 2015. The stock is currently trading 47% below its 52-week high price.

In comparison, The Fresh Market (TFM) has gained 22% YTD, riding high on the acquisition bid from Apollo while Sprouts Farmers Market (SFM) has gained 8.4% on its strong financial performance.

However, supermarket giant Kroger (KR) and organic and natural food pioneer Whole Foods Market (WFM) saw falling stock prices by 10% and 7.6%, respectively. In comparison, the S&P 500 Food & Staples Retail Index has gained around 3% YTD.

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SVU’s poor stock market performance is a result of its unimpressive operating and financial performance over the last couple of years. The company has scrambled to keep pace with the increasing competition in the supermarket industry. Its revenue has remained almost flat since fiscal 2012 and has grown by a compounded annual growth rate of 0.9% between 2012–2015.

Dividends

Supervalu (SVU) has not paid any dividends since fiscal 2013. In comparison, Kroger and Whole Foods Market have been consistent dividend payers. The two companies have dividend payout ratios of 19.5% and 34.8%, respectively.

Shareholders’ returns

Zero dividend payments, along with a poor showing in the stock market, have resulted in the lowest shareholder returns for SVU’s investors. The one-year total returns of the stock stand at -47% as compared to -13% for SFM, -26% for TFM, and -36% for WFM. Kroger is the only supermarket player that has yielded positive returns of 4% over the last one-year period.

ETF investors seeking to add exposure to SVU can consider the iShares Morningstar Small-Cap Value ETF (JKL), which invests 0.32% of its portfolio in the company.

Read the final part of this series to learn about the company’s earnings forecasts and valuations versus its peers.

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