Lancaster Colony (NASDAQ: LANC) and TreeHouse Foods (NYSE:THS) are both mid-cap consumer staples companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, earnings, dividends, profitability and analyst recommendations.
Volatility and Risk
Lancaster Colony has a beta of 0.99, indicating that its stock price is 1% less volatile than the S&P 500. Comparatively, TreeHouse Foods has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500.
Earnings & Valuation
This table compares Lancaster Colony and TreeHouse Foods’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Lancaster Colony||$1.20 billion||2.82||$115.31 million||$4.62||26.70|
|TreeHouse Foods||$6.31 billion||0.34||-$286.20 million||$2.81||13.59|
Lancaster Colony has higher earnings, but lower revenue than TreeHouse Foods. TreeHouse Foods is trading at a lower price-to-earnings ratio than Lancaster Colony, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent recommendations and price targets for Lancaster Colony and TreeHouse Foods, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Lancaster Colony presently has a consensus price target of $153.00, indicating a potential upside of 24.02%. TreeHouse Foods has a consensus price target of $53.55, indicating a potential upside of 40.25%. Given TreeHouse Foods’ higher possible upside, analysts plainly believe TreeHouse Foods is more favorable than Lancaster Colony.
Lancaster Colony pays an annual dividend of $2.40 per share and has a dividend yield of 1.9%. TreeHouse Foods does not pay a dividend. Lancaster Colony pays out 51.9% of its earnings in the form of a dividend. Lancaster Colony has increased its dividend for 55 consecutive years.
Institutional and Insider Ownership
53.2% of Lancaster Colony shares are owned by institutional investors. 31.9% of Lancaster Colony shares are owned by company insiders. Comparatively, 3.6% of TreeHouse Foods shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This table compares Lancaster Colony and TreeHouse Foods’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Lancaster Colony beats TreeHouse Foods on 13 of the 17 factors compared between the two stocks.
About Lancaster Colony
Lancaster Colony Corporation manufactures and markets specialty food products for the retail and foodservice markets in the United States. It offers salad dressings and sauces under the Marzetti, Marzetti Simply Dressed, Cardini's, and Girard's brands; vegetable dips and fruit dips under the Marzetti brand; frozen garlic breads under the New York BRAND Bakery, Mamma Bella, and Mamma Bella's brands; and frozen Parkerhouse style yeast and dinner rolls under the Sister Schubert's and Mary B's brands. The company also provides dry egg noodles under the Inn Maid and Amish Kitchen brands; frozen specialty noodles under the Reames and Aunt Vi's brands; croutons and salad toppings under the New York BRAND Bakery, New York BRAND Bakery Texas Toast, Chatham Village, Cardini's, Marzetti Simply Dressed, and Marzetti brands; sprouted grain bakery products under the Angelic Bakehouse and Flatzza brands; flatbread wraps and pizza crusts under the Flatout brand; and caviar under the Romanoff brand name. In addition, it manufactures and sells other products to brand license agreements, including Olive Garden's dressings and Jack Daniel's mustards, as well as endorsement agreements, such as Hungry Girl flatbreads. The company's products are sold through sales personnel, food brokers, and distributors to retailers and restaurants, as well as to industrial customers. Lancaster Colony Corporation was founded in 1961 and is based in Westerville, Ohio.
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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