Lamb Weston (NYSE: LW) and TreeHouse Foods (NYSE:THS) are both mid-cap consumer staples companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, analyst recommendations and dividends.
Volatility and Risk
Lamb Weston has a beta of 0.78, meaning that its stock price is 22% less volatile than the S&P 500. Comparatively, TreeHouse Foods has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500.
Institutional & Insider Ownership
80.7% of Lamb Weston shares are held by institutional investors. 0.3% of Lamb Weston shares are held by company insiders. Comparatively, 3.6% of TreeHouse Foods shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Earnings & Valuation
This table compares Lamb Weston and TreeHouse Foods’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Lamb Weston||$3.17 billion||3.02||$324.80 million||$2.32||28.17|
|TreeHouse Foods||$6.31 billion||0.34||-$286.20 million||$2.81||13.59|
Lamb Weston has higher earnings, but lower revenue than TreeHouse Foods. TreeHouse Foods is trading at a lower price-to-earnings ratio than Lamb Weston, indicating that it is currently the more affordable of the two stocks.
This table compares Lamb Weston and TreeHouse Foods’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Lamb Weston pays an annual dividend of $0.76 per share and has a dividend yield of 1.2%. TreeHouse Foods does not pay a dividend. Lamb Weston pays out 32.8% of its earnings in the form of a dividend.
This is a summary of current ratings for Lamb Weston and TreeHouse Foods, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Lamb Weston currently has a consensus target price of $59.17, suggesting a potential downside of 9.48%. TreeHouse Foods has a consensus target price of $53.55, suggesting a potential upside of 40.25%. Given TreeHouse Foods’ higher probable upside, analysts clearly believe TreeHouse Foods is more favorable than Lamb Weston.
Lamb Weston beats TreeHouse Foods on 10 of the 17 factors compared between the two stocks.
About Lamb Weston
Lamb Weston Holdings, Inc. produces and markets value-added frozen potato products worldwide. It operates through four segments: Global, Foodservice, Retail, and Other. The company offers frozen potatoes, sweet potatoes, and appetizers under the Lamb Weston brand name, as well as various customer labels. It serves retail and foodservice customers; grocery, mass, club, and specialty retailers; and businesses, independent restaurants, regional chain restaurants, and convenience stores, as well as educational institutions. The company was founded in 1950 and is headquartered in Eagle, Idaho.
About TreeHouse Foods
TreeHouse Foods, Inc. operates as a food and beverage manufacturer in the United States, Canada, and Italy. The company operates through Baked Goods, Beverages, Condiments, Meals, and Snacks segments. The Baked Goods segment offers candies, cookies, crackers, in-store bakery products, pita chips, pretzels, refrigerated dough, retail griddle waffles, pancakes, and French toasts. The Beverages segment offers broths, liquid non-dairy creamers, non-dairy powdered creamers, powdered drinks, single serve hot beverages, specialty teas, and sweeteners. The Condiments segment offers cheese and pudding products; jams, preserves, and jellies; mayonnaise; Mexican, barbeque, and other sauces; pickles and related products; refrigerated and shelf stable dressings and sauces; and table and flavored syrups. The Meals segment offers baking and mix powders; powdered soups and gravies; macaroni and cheese; pasta; ready-to-eat and hot cereals; skillet dinners; and condensed and ready to serve soup and infant feeding products. The Snacks segment offers bars, dried fruits, snack nuts, trail mixes, and other wholesome snacks. The company sells its products through various distribution channels comprising grocery retailers and foodservice distributors, as well as food manufacturers and repackagers of foodservice products. TreeHouse Foods, Inc. was founded in 1862 and is based in Oak Brook, Illinois.
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