SYSCO Corporation (SYY), SUPERVALU INC. (SVU): Two Grocers to Buy and One to Sell

Analysts agree. They have steady growth expectations for Wal-Mart Stores, Inc. (NYSE:WMT). Revenue is expected to grow by 3.9% during this fiscal year and another 4.6% next year. The company’s EPS is set to climb 5.5% this fiscal year and 10% next. The move to lower prices will result in a gradual uptake in the consumer market as customers begin to notice the increasingly lower prices at the store.

Where to put your money

I like the prospects of SYSCO Corporation (NYSE:SYY) and Wal-Mart Stores, Inc. (NYSE:WMT), but I wouldn’t buy SUPERVALU INC. (NYSE:SVU). Sysco will continue to increase its clientele as it moves into other segments, and the new products it is offering are already locked into demand due to the company’s strategy of consulting its customers. Wal-Mart will win the battle for bargain-grocer supremacy due to its ability to lower its prices as a result of its low operating expenses. Wal-Mart also has the advantage of being able to fund its massive expansion plan. Keep an eye out for returns at Supervalu, however, as the company may be able to increase its operating efficiency as a result of its recent sales.

Phillip Woolgar has no position in any stocks mentioned. The Motley Fool recommends Sysco. The Motley Fool owns shares of Supervalu.

The article Two Grocers to Buy and One to Sell originally appeared on Fool.com.

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