Comparing Freshpet (NASDAQ:FRPT) & Sysco (NYSE:SYY)

Freshpet (NASDAQ:FRPT) and Sysco (NYSE:SYY) are both consumer staples companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, analyst recommendations, risk, institutional ownership, profitability and earnings.

Analyst Recommendations

This is a breakdown of recent ratings for Freshpet and Sysco, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Freshpet	1	6	11	0	2.56
Sysco	0	7	9	0	2.56

Freshpet currently has a consensus target price of $74.88, indicating a potential upside of 45.16%. Sysco has a consensus target price of $88.15, indicating a potential upside of 15.54%. Given Freshpet’s higher possible upside, equities research analysts clearly believe Freshpet is more favorable than Sysco.

Profitability

This table compares Freshpet and Sysco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Freshpet	17.63%	6.22%	4.19%
Sysco	2.08%	103.57%	8.06%

Volatility and Risk

Freshpet has a beta of 1.73, meaning that its stock price is 73% more volatile than the S&P 500. Comparatively, Sysco has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500.

Valuation & Earnings

This table compares Freshpet and Sysco”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Freshpet	$1.10 billion	2.30	$139.14 million	$3.74	13.79
Sysco	$83.57 billion	0.44	$1.83 billion	$3.61	21.14

Sysco has higher revenue and earnings than Freshpet. Freshpet is trading at a lower price-to-earnings ratio than Sysco, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

83.4% of Sysco shares are held by institutional investors. 4.4% of Freshpet shares are held by insiders. Comparatively, 0.6% of Sysco shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

About Freshpet

Freshpet, Inc., together with its subsidiaries, manufactures, distributes, and markets natural fresh meals and treats for dogs and cats in the United States, Canada, and Europe. It sells dog food, cat food, and dog treats under the Freshpet brand name; and Dognation and Dog Joy labels through various classes of retail, including grocery, mass, club, pet specialty, and natural, as well as online. The company was incorporated in 2004 and is headquartered in Secaucus, New Jersey.

About Sysco

Sysco Corporation, through its subsidiaries, engages in the marketing and distribution of various food and related products to the foodservice or food-away-from-home industry in the United States, Canada, the United Kingdom, France, and internationally. It operates through U.S. Foodservice Operations, International Foodservice Operations, SYGMA, and Other segments. The company distributes frozen food, such as meat, seafood, fully prepared entrées, fruits, vegetables, and desserts; canned and dry food products; fresh meat and seafood products; dairy products; beverages; imported specialties; and fresh produce products. It also supplies various non-food items, including paper products comprising disposable napkins, plates, and cups; tableware consisting of glassware and silverware; cookware, such as pots, pans, and utensils; restaurant and kitchen equipment and supplies; and cleaning supplies. The company serves restaurants, hospitals and nursing facilities, schools and colleges, hotels and motels, industrial caterers, and other foodservice venues. Sysco Corporation was incorporated in 1969 and is headquartered in Houston, Texas.