Tesco vs Sainsbury’s stock: the numbers side by side (October 2026)
How do Tesco and Sainsbury’s compare?
| Tesco TSCO.L | Sainsbury’s SBRY.L | |
|---|---|---|
| Free cash flow | 1,393£ millions; per share in pence; shares in millions · Year to Feb 2026 | Year to Feb 2027£ millions unless stated · Period |
| Dividend yield | 2.9%Today (Oct 9, 2026) | 3.9%Today (Oct 23, 2026) |
| P/E, next 12 months | 14.8xToday (Oct 9, 2026) | 13.3xToday (Oct 23, 2026) |
| Weighted price forecast, about 1 year | 549.60 (+11 %)October 2027 | 336.11 (-1 %)October 2027 |
| Weighted price forecast, about 3 years | 600.95 (+28 %)October 2029 | 393.95 (+24 %)October 2029 |
Who leads on what?
| Leads | The lead is | |
|---|---|---|
| Free cash flow | — | The higher figure |
| Dividend yield | Sainsbury’s | The higher figure |
| P/E, next 12 months | Sainsbury’s | The lower figure |
| Weighted price forecast, about 1 year | Tesco | The higher weighted return |
| Weighted price forecast, about 3 years | Tesco | The higher weighted return |
What does each company do?
Tesco sells groceries and household goods to households through stores and online.
Tesco (TSCO.L), from our memo of October 10, 2026 · Tesco stock forecast
Sainsbury’s sells groceries and household essentials to UK shoppers through supermarkets, convenience stores and online.
Sainsbury’s (SBRY.L), from our memo of October 23, 2026 · Sainsbury’s stock forecast
How big are Tesco and Sainsbury’s?
The market valued Tesco at £31,839.4 million on October 9, 2026 and Sainsbury’s at £7,799.05 million on October 23, 2026.
How fast are Tesco and Sainsbury’s growing, and what did their latest results show?
Revenue reached £37,353m, up from £36,036m. Operating income rose from £1,603m to £1,709m. Net income increased from £950m to £1,060m, while diluted EPS rose from 14.20p to 16.70p. Profit grew faster than revenue, but fewer shares also helped EPS.
Tesco (TSCO.L), from our memo of October 10, 2026 · Tesco earnings
How much cash do Tesco and Sainsbury’s generate, and where does it go?
The dividend yield stood at 2.9% on October 9, 2026 for Tesco and 3.9% on October 23, 2026 for Sainsbury’s.
Share-based pay is also an economic cost because employees receive ownership that would otherwise belong to existing shareholders. Deducting £105m produced an analytical real free cash flow of £1,288m, or 19.50p per diluted share. This is not a separate statutory cash line, and careless adjustments can count some share-related cash costs twice.
Tesco (TSCO.L), from our memo of October 10, 2026 · Tesco stock forecast
Retail free cash flow was £574 million in FY2026, below the £645 million FY2023 peak. Cash capital expenditure was £843 million and lease-principal repayments were £504 million. Shops, refrigeration, technology and distribution facilities require continuing investment, even though depreciation itself is non-cash.
Sainsbury’s (SBRY.L), from our memo of October 23, 2026 · Sainsbury’s stock forecast
What does an investor pay for Tesco and Sainsbury’s today?
The shares of Tesco were priced at 14.8x the next 12 months’ earnings on October 9, 2026; those of Sainsbury’s at 13.3x the next 12 months’ earnings on October 23, 2026.
The earnings multiple depends on which earnings are counted. Tesco trades at 17.2 times last-twelve-month earnings and 14.8 times expected next-twelve-month earnings. Reported earnings include every recognised cost, gain and loss; adjusted earnings remove items Tesco considers less useful for judging normal trading. Reported diluted earnings per share were 27.1p, while adjusted earnings were 29.0p. The statutory year also contained 53 weeks, complicating comparisons.
Tesco (TSCO.L), from our memo of October 10, 2026 · Tesco stock forecast
A 3.9% dividend yield implies roughly £304 million of annual distributions on the market value. The remaining cash must also fund buybacks, separation costs, store upkeep, competitive prices and debt obligations. The price is therefore assuming that Sainsbury’s can make its simpler business consistently cash-generative without relying on another asset sale.
Sainsbury’s (SBRY.L), from our memo of October 23, 2026 · Sainsbury’s dividend