Critical Contrast: Darling Ingredients (NYSE:DAR) and Lamb Weston (NYSE:LW)

Darling Ingredients (NYSE:DAR) and Lamb Weston (NYSE:LW) are both mid-cap consumer staples companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, risk, valuation, earnings, analyst recommendations, institutional ownership and profitability.

Earnings & Valuation

This table compares Darling Ingredients and Lamb Weston”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Darling Ingredients	$6.14 billion	1.53	$62.80 million	$1.38	42.73
Lamb Weston	$6.45 billion	0.92	$357.20 million	$2.14	20.19

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

Institutional and Insider Ownership

94.4% of Darling Ingredients shares are owned by institutional investors. Comparatively, 89.6% of Lamb Weston shares are owned by institutional investors. 1.9% of Darling Ingredients shares are owned by company insiders. Comparatively, 0.3% of Lamb Weston shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Darling Ingredients and Lamb Weston, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Darling Ingredients	0	2	10	1	2.92
Lamb Weston	1	10	3	0	2.14

Darling Ingredients presently has a consensus target price of $69.00, indicating a potential upside of 17.03%. Lamb Weston has a consensus target price of $47.82, indicating a potential upside of 10.67%. Given Darling Ingredients’ stronger consensus rating and higher probable upside, equities analysts plainly believe Darling Ingredients is more favorable than Lamb Weston.

Volatility and Risk

Darling Ingredients has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500. Comparatively, Lamb Weston has a beta of 0.47, indicating that its share price is 53% less volatile than the S&P 500.

Profitability

This table compares Darling Ingredients and Lamb Weston’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Darling Ingredients	3.54%	5.65%	2.61%
Lamb Weston	4.61%	23.77%	5.76%

Summary

Darling Ingredients beats Lamb Weston on 9 of the 15 factors compared between the two stocks.

About Darling Ingredients

Darling Ingredients Inc. develops, produces, and sells natural ingredients from edible and inedible bio-nutrients in North America, Europe, China, South America, and internationally. The company operates through three segments: Feed Ingredients, Food Ingredients, and Fuel Ingredients. It offers ingredients and customized specialty solutions for customers in the pharmaceutical, food, pet food, feed, industrial, fuel, bioenergy, and fertilizer industries. The company also collects and transforms various animal by-product streams into useable and specialty ingredients, such as collagen, edible fats, feed-grade fats, animal proteins and meals, plasma, pet food ingredients, organic fertilizers, yellow grease, fuel feedstock, green energy, natural casings, and hides. In addition, it recovers and converts used cooking oil and animal fats, and residual bakery products into valuable feed and fuel ingredients. Further, the company provides environmental services, including grease trap collection and disposal services to food service establishments. It primarily operates under the Rendac, Sonac, FASA, Ecoson, Rousselot, Gelnex, and CTH brand names. The company was formerly known as Darling International Inc. and changed its name to Darling Ingredients Inc. in May 2014. Darling Ingredients Inc. was founded in 1882 and is headquartered in Irving, Texas.

About Lamb Weston

Lamb Weston Holdings, Inc. produces, distributes, and markets frozen potato products worldwide. The company operates through four segments: Global, Foodservice, Retail, and Other. It offers frozen potatoes, commercial ingredients, and appetizers under the Lamb Weston brand, as well as under various customer labels. The company also provides its products under its owned or licensed brands, such as Grown in Idaho and Alexia, and other licensed brands, as well as under retailers' own brands. In addition, it engages in the vegetable and dairy businesses. The company sells its products through a network of internal sales personnel and independent brokers, agents, and distributors to chain restaurants, wholesale, grocery, mass merchants, club and specialty retailers, businesses, educational institutions, independent restaurants, regional chain restaurants, and convenience stores. Lamb Weston Holdings, Inc. was incorporated in 1950 and is headquartered in Eagle, Idaho.