Core-Mark Holding Company (NASDAQ: CORE) and SpartanNash Company (NASDAQ:SPTN) are both small-cap business services companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, valuation, analyst recommendations, profitabiliy, institutional ownership and risk.

Profitability

This table compares Core-Mark Holding Company and SpartanNash Company’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Core-Mark Holding Company 0.34% 11.42% 4.24%
SpartanNash Company 0.79% 10.03% 4.10%

Dividends

Core-Mark Holding Company pays an annual dividend of $0.36 per share and has a dividend yield of 1.0%. SpartanNash Company pays an annual dividend of $0.66 per share and has a dividend yield of 2.4%. Core-Mark Holding Company pays out 32.7% of its earnings in the form of a dividend. SpartanNash Company pays out 40.0% 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.

Valuation & Earnings

This table compares Core-Mark Holding Company and SpartanNash Company’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Core-Mark Holding Company $11.86 billion 0.13 $130.70 million $1.10 31.27
SpartanNash Company $7.86 billion 0.13 $225.80 million $1.65 16.48

SpartanNash Company has higher revenue, but lower earnings than Core-Mark Holding Company. SpartanNash Company is trading at a lower price-to-earnings ratio than Core-Mark Holding Company, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Core-Mark Holding Company has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500. Comparatively, SpartanNash Company has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.

Institutional & Insider Ownership

98.5% of Core-Mark Holding Company shares are owned by institutional investors. Comparatively, 88.3% of SpartanNash Company shares are owned by institutional investors. 2.4% of Core-Mark Holding Company shares are owned by company insiders. Comparatively, 3.0% of SpartanNash Company shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and price targets for Core-Mark Holding Company and SpartanNash Company, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Core-Mark Holding Company 0 1 3 0 2.75
SpartanNash Company 0 4 1 0 2.20

Core-Mark Holding Company currently has a consensus target price of $40.75, indicating a potential upside of 18.46%. SpartanNash Company has a consensus target price of $32.25, indicating a potential upside of 18.57%. Given SpartanNash Company’s higher probable upside, analysts clearly believe SpartanNash Company is more favorable than Core-Mark Holding Company.

Summary

Core-Mark Holding Company beats SpartanNash Company on 9 of the 16 factors compared between the two stocks.

Core-Mark Holding Company Company Profile

Core-Mark Holding Company, Inc. is a wholesale distributor to the convenience retail industry in North America. The Company provides sales, marketing, distribution and logistics services. As of December 31, 2016, the Company offered services to over 43,000 customer locations across the United States and Canada through 30 distribution centers. The Company’s segments include the United States, Canada and Corporate. The Company’s primary customer base consists of traditional convenience stores, as well as alternative outlets selling consumer packaged goods. The Company’s traditional convenience store customers include various national and super-regional convenience store operators, as well as independently owned convenience stores. Its alternative outlet customers include a range of store formats, including grocery stores, drug stores, liquor stores, cigarette and tobacco shops, hotel gift shops, military exchanges, college and corporate campuses, casinos and hardware stores.

SpartanNash Company Company Profile

SpartanNash Company is a multi-regional grocery distributor and grocery retailer. The Company’s core businesses include distributing grocery products to independent grocery retailers (independent retailers), select national retailers, its corporate owned retail stores, and the United States military commissaries. The Company operates through three segments: Food Distribution, Military and Retail. The Food Distribution segment provides a range of nationally branded and private brand grocery products and perishable food products to independent retailers, food service distributors and its corporate owned retail stores. The Military segment contracts with manufacturers to distribute a range of grocery products primarily to military commissaries and exchanges located in the United States, the District of Columbia, Europe, Cuba, Puerto Rico, Bahrain and Egypt. As of December 31, 2016, the Retail segment operated 157 corporate owned retail stores in the Midwest and Great Lakes regions.

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