DavidsTea (NASDAQ: DTEA) and US Foods (NYSE:USFD) are both consumer staples companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, earnings, profitability, institutional ownership, valuation and risk.
Risk & Volatility
DavidsTea has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500. Comparatively, US Foods has a beta of 0.43, meaning that its stock price is 57% less volatile than the S&P 500.
Insider & Institutional Ownership
12.0% of DavidsTea shares are held by institutional investors. Comparatively, 99.8% of US Foods shares are held by institutional investors. 1.6% of US Foods shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares DavidsTea and US Foods’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|DavidsTea||$164.02 million||0.57||-$4.83 million||($0.31)||-11.61|
|US Foods||$24.15 billion||0.30||$444.29 million||$1.98||16.95|
US Foods has higher revenue and earnings than DavidsTea. DavidsTea is trading at a lower price-to-earnings ratio than US Foods, indicating that it is currently the more affordable of the two stocks.
This table compares DavidsTea and US Foods’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of recent ratings and recommmendations for DavidsTea and US Foods, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
DavidsTea presently has a consensus target price of $6.00, suggesting a potential upside of 66.67%. US Foods has a consensus target price of $35.33, suggesting a potential upside of 5.25%. Given DavidsTea’s higher probable upside, equities analysts clearly believe DavidsTea is more favorable than US Foods.
US Foods beats DavidsTea on 11 of the 14 factors compared between the two stocks.
DavidsTea Company Profile
DAVIDsTEA Inc. is engaged in the retail and online sale of tea, tea accessories, and food and beverages in Canada and in the United States. The Company’s segments include Canada and the U.S. The Company is a branded retailer of specialty tea, offering approximately 150 loose-leaf teas, pre-packaged teas, tea sachets and tea-related gifts, accessories, and food and beverages primarily through approximately 190 DAVIDsTEA stores, which are operated by the Company, and its Website, davidstea.com. Additionally, the Company offers on-the-go tea beverages in its retail stores. The Company’s tea accessories include tea mugs, travel mugs, teacup sets, teapots, tea makers, kettles, infusers, filters, frothers, tins and spoons. The Company offers beverages range from the standard hot or iced tea to its Tea Lattes. The Company’s different flavors of loose-leaf tea span eight tea categories: white, green, oolong, black, pu’erh, mate, rooibos and herbal tea.
US Foods Company Profile
US Foods Holding Corp. is a holding company. The Company is a foodservice distributor in the United States. The Company, through US Foods, Inc. (USF), markets and primarily distributes fresh, frozen and dry food and non-food products to foodservice customers throughout the United States. These customers include independently owned single and multi-unit restaurants, regional concepts, national restaurant chains, hospitals, nursing homes, hotels and motels, country clubs, government and military organizations, colleges and universities, and retail locations. As of December 31, 2016, the Company provided approximately 400,000 fresh, frozen, and dry food stock-keeping units (SKUs), as well as non-food items, sourced from over 5,000 suppliers. As of January 31, 2017, it maintained 75 primary operating facilities, consisting of its 60 distribution centers and other supporting facilities.
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