Contrasting Leslie’s (NASDAQ:LESL) and Krispy Kreme (NASDAQ:DNUT)

Leslie’s (NASDAQ:LESL) and Krispy Kreme (NASDAQ:DNUT) are both small-cap consumer staples companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Insider and Institutional Ownership

81.7% of Krispy Kreme shares are held by institutional investors. 0.5% of Leslie’s shares are held by company insiders. Comparatively, 3.0% of Krispy Kreme shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Leslie’s and Krispy Kreme”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Leslie’s	$1.24 billion	0.01	-$236.97 million	($29.66)	-0.05
Krispy Kreme	$1.51 billion	0.41	-$515.77 million	($2.99)	-1.20

Leslie’s has higher earnings, but lower revenue than Krispy Kreme. Krispy Kreme is trading at a lower price-to-earnings ratio than Leslie’s, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings for Leslie’s and Krispy Kreme, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Leslie’s	2	4	0	0	1.67
Krispy Kreme	3	1	3	1	2.25

Leslie’s presently has a consensus target price of $2.81, suggesting a potential upside of 74.69%. Krispy Kreme has a consensus target price of $4.63, suggesting a potential upside of 28.47%. Given Leslie’s’ higher probable upside, research analysts plainly believe Leslie’s is more favorable than Krispy Kreme.

Profitability

This table compares Leslie’s and Krispy Kreme’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Leslie’s	-22.69%	N/A	-7.11%
Krispy Kreme	-33.36%	-4.25%	-1.12%

Risk & Volatility

Leslie’s has a beta of 1.53, suggesting that its stock price is 53% more volatile than the S&P 500. Comparatively, Krispy Kreme has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500.

Summary

Krispy Kreme beats Leslie’s on 9 of the 15 factors compared between the two stocks.

About Leslie’s

Leslie’s, Inc. operates as a direct-to-consumer pool and spa care brand in the United States. The company markets and sells pool and spa supplies and related products and services. It also offers various pool and spa maintenance items, such as chemicals, equipment and parts, cleaning and maintenance equipment, safety, recreational, and fitness related products. In addition, the company provides installation and repair services for pool and spa equipment. It also sells its products through e-commerce websites and third-party marketplaces. The company offers complimentary, commercial-grade in-store, water testing, and analysis services. It serves the residential, professional, and commercial consumers. Leslie’s, Inc. was founded in 1963 and is based in Phoenix, Arizona.

About Krispy Kreme

Krispy Kreme, Inc., together with its subsidiaries, produces doughnuts in the United States, the United Kingdom, Ireland, Australia, New Zealand, Mexico, Canada, Japan, and internationally. The company operates through three segments: U.S., International, and Market Development. The company offers doughnut experiences through hot light theater and fresh shops, delivered fresh daily branded cabinets and merchandising units within grocery and convenience stores, quick service restaurants, club memberships, drug stores, and ecommerce, as well as through its branded sweet treat line comprising Krispy Kreme branded sweet treats. It also provides cookies under the Insomnia Cookies brand, cookie cakes, ice cream, cookie-wiches, and brownies; and operates Krispy Kreme company-owned shops and franchise shops. The company was formerly known as Krispy Kreme Doughnuts, Inc. and changed its name to Krispy Kreme, Inc. in May 2021. Krispy Kreme, Inc. was founded in 1937 and is based in Charlotte, North Carolina.