The Tesco (LSE:TSCO) share price is up 22% over the past 12 months while Sainsbury’s (LSE:SBRY) shares are flat. In fact, there’s been quite a divergence in fortunes in recent years, with the Tesco share price almost doubling from lows three years ago.
However, which stock is better value for investors today? Here’s some metrics that may help us make the right investing decisions.
1. Price-to-earnings
Looking at the price-to-earnings (P/E) ratio, Tesco’s valuation shows a steady decline from 16 times earnings in 2025 to 13.4 times by 2027. This decrease aligns with Tesco’s consistent earnings per share (EPS) growth, rising from 23.5p in 2025 to 28.3p in 2027.
By contrast, Sainsbury’s P/E ratio starts higher at 13.6 times for the forward year (2026) but falls sharply to 11.4 times by 2028. This data suggests that Sainsbury’s is cheaper but may be growing at a slightly slower rate. It’s also worth noting that the forward reporting periods are slightly different.
2. Revenue growth
Tesco’s revenue is expected to grow steadily from £69.9bn in 2025 to £73.7bn in 2027, reflecting consistent sales expansion. Sainsbury’s revenue also increases, pretty much at the same pace in percentage terms. It’s expected to move from £33.1bn in 2025 to £35bn by 2028. While both supermarkets are growing, Tesco’s scale gives it a clear advantage in absolute sales, nearly doubling Sainsbury’s revenue throughout the period.
3. Market share
In terms of market share, Tesco remains the UK’s leading grocer with 27.8% of the market as of April. Sainsbury’s holds a respectable second place with 15.3%. Both retailers have seen slight gains compared to the previous year, with Tesco up from 27.3% and Sainsbury’s from 15.2%. This stability highlights Tesco’s dominant position and Sainsbury’s steady hold on its segment of the market.
4. Dividend yield
The dividend yield tells an interesting story. Sainsbury’s offers a higher yield, rising from 5.1% in 2026 to 5.61% in 2028, compared to Tesco’s more modest 3.58% to 3.98% over 2025 to 2027.
However, Sainsbury’s payout ratio’s higher, starting at 69% in 2026 and falling to around 64% by 2028. Tesco’s payout ratio’s more conservative, around 58% in 2025 and just over 53% by 2027, suggesting a more balanced approach to rewarding shareholders while retaining earnings for growth.
5. Net debt
When it comes to the balance sheet, Tesco carries a heavier debt load. Net debt’s expected to come in around £9.45bn in 2025, rising slightly to nearly £11bn by 2027. Sainsbury’s net debt is lower, starting at £5.01bn in 2026 and rising modestly to £5.48bn by 2028. Both companies maintain manageable debt levels relative to their earnings and capitalisation.
The bottom line
In summary, there’s little to separate the two overall. But in a deepening price war, scale matters. Tesco’s size gave it the edge during the cost-of-living crisis, and that advantage is likely to persist. However, personally, I believe both are worth considering. I’m keeping my powder dry for now though.
