Whole Foods Market, Inc. (WFM): Reasons To Buy

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But the biggest challenge to Whole Foods Markets is increased competition which could impact the outfits’ revenues and profitability. This includes the other market players mentioned above, as well as direct competitors like The Fresh Market Inc (NASDAQ:TFM) and The Kroger Co. (NYSE:KR).

The Fresh Market is significantly smaller than Whole Foods, and also markets itself as offering healthy alternatives. However, the company has missed estimates the last two quarters and a number of executives recently “spit the bit” to pursue other opportunities. The outfit also has a very high P/E ratio of 30.29 – well above the S&P 500 ratio. Because of its smaller size The Fresh Market Inc (NASDAQ:TFM) faces mounting pressure from a weak consumer.

Finally, The Kroger Co. (NYSE:KR) has more retail stores that Whole Foods Market, Inc. (NASDAQ:WFM), but the chain offers more of a regular supermarket experience. That being said, some observers argue that Kroger’s stock has performed well thus far in 2013 and that the outfit will continue to do so in the second half of the year. In fact, Kroger’s share price has already gained about 30%. And it still trades at a reasonable price-to-earnings ratio while paying a decent dividend.

While The Kroger Co. (NYSE:KR) is also probably a good play for investors looking to garner profits in the retail grocer sector, Whole Foods Market’s dedication to the organic food chain still puts the green grocer in a good spot. The bottom line: Whole Foods Markets should continue to perform well in 2013 and is also a worthy long-term investment.

The article Key Reasons To Invest in Whole Foods Market originally appeared on Fool.com and is written by Kyle Colona.

Kyle Colona has no position in any stocks mentioned. He is a freelance writer from the New York area with a broad background in legal and regulatory affairs in the finance sector. His extensive body of work is accessible on the web. Mr. Colona is not a financial advisor. This article is for informational purposes only and should not be construed as financial advice.

The Motley Fool recommends The Fresh Market and Whole Foods Market. The Motley Fool owns shares of Whole Foods Market.

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