Analyzing Vital Farms (NASDAQ:VITL) and Hormel Foods (NYSE:HRL)

Hormel Foods (NYSE:HRL) and Vital Farms (NASDAQ:VITL) are both consumer staples companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, earnings and valuation.

Risk & Volatility

Hormel Foods has a beta of 0.27, suggesting that its share price is 73% less volatile than the S&P 500. Comparatively, Vital Farms has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500.

Insider & Institutional Ownership

41.0% of Hormel Foods shares are owned by institutional investors. Comparatively, 98.6% of Vital Farms shares are owned by institutional investors. 0.6% of Hormel Foods shares are owned by insiders. Comparatively, 3.9% of Vital Farms shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Hormel Foods and Vital Farms’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hormel Foods	2.82%	9.91%	5.89%
Vital Farms	-3.03%	-3.74%	-2.24%

Analyst Recommendations

This is a summary of recent ratings for Hormel Foods and Vital Farms, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hormel Foods	1	6	1	0	2.00
Vital Farms	1	7	7	0	2.40

Hormel Foods presently has a consensus target price of $25.43, suggesting a potential upside of 14.67%. Vital Farms has a consensus target price of $12.64, suggesting a potential upside of 39.94%. Given Vital Farms’ stronger consensus rating and higher possible upside, analysts clearly believe Vital Farms is more favorable than Hormel Foods.

Earnings & Valuation

This table compares Hormel Foods and Vital Farms”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hormel Foods	$12.11 billion	1.01	$478.20 million	$0.63	35.20
Vital Farms	$759.44 million	0.51	$66.28 million	($0.55)	-16.42

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

Summary

Hormel Foods beats Vital Farms on 8 of the 14 factors compared between the two stocks.

About Hormel Foods

Hormel Foods Corporation is a branded food company that produces and markets meat and other food products for retail, foodservice and other customers. Its offerings include pork, turkey and other meat products, as well as refrigerated and shelf-stable foods. The company’s brands include Hormel, SPAM, Jennie-O, Skippy, Applegate and Planters. Its products are sold in the United States and in international markets. Founded in 1891 by George A. Hormel in Austin, Minnesota, the company has grown from a local meatpacking business into a diversified food producer.

About Vital Farms

Vital Farms, Inc. is a food company that produces and markets pasture-raised eggs and butter. Its products are sold under the Vital Farms brand and include shell eggs, hard-boiled eggs and butter. Founded in 2007 and headquartered in Austin, Texas, the company works with a network of family farms that raise hens on pasture. Vital Farms sources its products from farms primarily across the United States. The company distributes its products through grocery retailers and other food channels, including foodservice.