Lifeway Foods (NASDAQ:LWAY) & Flowers Foods (NYSE:FLO) Financial Contrast

Flowers Foods (NYSE:FLO) and Lifeway Foods (NASDAQ:LWAY) are both small-cap consumer staples companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, risk, dividends, institutional ownership, profitability, valuation and analyst recommendations.

Earnings & Valuation

This table compares Flowers Foods and Lifeway Foods”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Flowers Foods	$5.22 billion	0.25	$83.82 million	$0.26	23.57
Lifeway Foods	$242.41 million	1.42	$13.86 million	$0.70	32.57

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

Volatility and Risk

Flowers Foods has a beta of 0.43, meaning that its share price is 57% less volatile than the S&P 500. Comparatively, Lifeway Foods has a beta of 0.47, meaning that its share price is 53% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Flowers Foods and Lifeway Foods, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Flowers Foods	3	4	0	0	1.57
Lifeway Foods	0	1	2	1	3.00

Flowers Foods currently has a consensus price target of $6.80, indicating a potential upside of 10.98%. Lifeway Foods has a consensus price target of $34.00, indicating a potential upside of 49.12%. Given Lifeway Foods’ stronger consensus rating and higher probable upside, analysts plainly believe Lifeway Foods is more favorable than Flowers Foods.

Profitability

This table compares Flowers Foods and Lifeway Foods’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Flowers Foods	1.06%	14.91%	4.72%
Lifeway Foods	4.48%	12.66%	9.29%

Dividends

Flowers Foods pays an annual dividend of $0.50 per share and has a dividend yield of 8.2%. Lifeway Foods pays an annual dividend of $0.08 per share and has a dividend yield of 0.4%. Flowers Foods pays out 192.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Lifeway Foods pays out 11.4% of its earnings in the form of a dividend. Flowers Foods has increased its dividend for 24 consecutive years. Flowers Foods is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

75.4% of Flowers Foods shares are owned by institutional investors. Comparatively, 36.4% of Lifeway Foods shares are owned by institutional investors. 7.2% of Flowers Foods shares are owned by insiders. Comparatively, 18.6% of Lifeway Foods shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Lifeway Foods beats Flowers Foods on 12 of the 18 factors compared between the two stocks.

About Flowers Foods

Flowers Foods, Inc. produces and markets packaged bakery food products in the United States. Its principal products include fresh breads, buns, rolls, snack items, bagels, English muffins, and tortillas, as well as frozen breads and rolls under the Nature's Own, Dave's Killer Bread, Wonder, Canyon Bakehouse, Mrs. Freshley's, and Tastykake brand names. The company distributes its products through a direct-store-delivery distribution and a warehouse delivery system, as well as operates bakeries. Its customers include national and regional restaurants, institutions and foodservice distributors, and retail in-store bakeries; wholesale distributors; mass merchandisers, supermarkets, vending outlets, and convenience stores; quick-serve chains, food wholesalers, institutions, dollar stores, and vending companies; and public health care, military commissaries, and prisons, and other governmental institutions. The company was formerly known as Flowers Industries and changed its name to Flowers Foods, Inc. in 2001. Flowers Foods, Inc. was founded in 1919 and is headquartered in Thomasville, Georgia.

About Lifeway Foods

Lifeway Foods, Inc. produces and markets probiotic-based products in the United States and internationally. Its primary product is drinkable kefir, a cultured dairy product in various organic and non-organic sizes, flavors, and types. The company offers European-style soft cheeses; cream and other products; ProBugs, a line of kefir products designed for children; drinkable yogurt; and fresh made butter and sour cream. It sells its products under the Lifeway, GlenOaks Farms, and Fresh Made brand names, as well as under private labels on behalf of customers primarily through direct sales force, brokers, and distributors. Lifeway Foods, Inc. was incorporated in 1986 and is based in Morton Grove, Illinois.