Contrasting Medifast (NYSE:MED) and Armanino Foods of Distinction (OTCMKTS:AMNF)

Medifast (NYSE:MED) and Armanino Foods of Distinction (OTCMKTS:AMNF) are both small-cap consumer staples companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, risk, profitability, valuation, dividends, institutional ownership and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Medifast and Armanino Foods of Distinction, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Medifast	1	1	0	0	1.50
Armanino Foods of Distinction	0	1	1	1	3.00

Medifast presently has a consensus price target of $12.00, indicating a potential downside of 4.76%. Armanino Foods of Distinction has a consensus price target of $15.00, indicating a potential upside of 46.56%. Given Armanino Foods of Distinction’s stronger consensus rating and higher probable upside, analysts plainly believe Armanino Foods of Distinction is more favorable than Medifast.

Insider & Institutional Ownership

95.5% of Medifast shares are held by institutional investors. Comparatively, 0.1% of Armanino Foods of Distinction shares are held by institutional investors. 3.7% of Medifast shares are held by insiders. Comparatively, 30.2% of Armanino Foods of Distinction shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Medifast and Armanino Foods of Distinction”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Medifast	$385.79 million	0.36	-$18.67 million	($1.83)	-6.89
Armanino Foods of Distinction	$76.10 million	4.18	$18.80 million	$0.62	16.51

Armanino Foods of Distinction has lower revenue, but higher earnings than Medifast. Medifast is trading at a lower price-to-earnings ratio than Armanino Foods of Distinction, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Medifast and Armanino Foods of Distinction’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Medifast	-5.78%	-4.80%	-3.83%
Armanino Foods of Distinction	25.06%	49.10%	35.60%

Volatility & Risk

Medifast has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500. Comparatively, Armanino Foods of Distinction has a beta of 0.07, suggesting that its share price is 93% less volatile than the S&P 500.

Summary

Armanino Foods of Distinction beats Medifast on 12 of the 15 factors compared between the two stocks.

About Medifast

Medifast, Inc., through its subsidiaries, engages in the manufacture and sale of weight loss, weight management, and healthy living products in the United States and the Asia-Pacific. It offers bars, puffs, cereal, crunchers, drinks, hearty choices, oatmeal, pancakes, pudding, soft serve, shakes, smoothies, soft bakes, and soups under the OPTAVIA, OPTAVIA ACTIVE, and Optimal Health brand names. The company markets its products through point-of-sale transactions, as well as through ecommerce platform. Medifast, Inc. was founded in 1980 and is headquartered in Baltimore, Maryland.

About Armanino Foods of Distinction

Armanino Foods of Distinction, Inc. produces and markets frozen food products in the United States. The company offers gourmet beef, Italian style beef and pork, and smoked turkey meatballs; grated parmesan and 3 cheese blend cheese; and various pesto, such as basil, artichoke, cilantro, dried tomato and garlic, roasted garlic, roasted red bell pepper, and southwest chipotle. It also provides frozen pasta, which includes beef cannelloni, cheese manicotti, cheese stuffed shells, cheese tortellini; pasta sheets, potato gnocchi, and tricolor cheese tortellini, as well as beef, butternut squash, four cheese, cheese and spinach, and wild mushroom ravioli; and various sauces, comprising creamy garlic, alfresco, Bolognese, chimichurri, harissa, and romesco. The company offers its products under the Armanino brand. It markets its products through a network of food brokers and sells to retail and foodservice distributors, club-type stores, and industrial accounts. The company was founded in 1978 and is based in Hayward, California.