Analyzing Sprouts Farmers Market (NASDAQ:SFM) & Andersons (NASDAQ:ANDE)

Sprouts Farmers Market (NASDAQ:SFM) and Andersons (NASDAQ:ANDE) are both consumer staples companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, dividends, profitability, earnings and risk.

Profitability

This table compares Sprouts Farmers Market and Andersons’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sprouts Farmers Market	5.45%	33.83%	11.53%
Andersons	1.84%	17.12%	6.15%

Insider & Institutional Ownership

87.1% of Andersons shares are owned by institutional investors. 1.3% of Sprouts Farmers Market shares are owned by insiders. Comparatively, 4.3% of Andersons shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Sprouts Farmers Market and Andersons, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sprouts Farmers Market	3	7	6	0	2.19
Andersons	0	0	4	1	3.20

Sprouts Farmers Market currently has a consensus target price of $64.77, indicating a potential upside of 32.53%. Andersons has a consensus target price of $95.00, indicating a potential upside of 74.38%. Given Andersons’ stronger consensus rating and higher possible upside, analysts plainly believe Andersons is more favorable than Sprouts Farmers Market.

Earnings and Valuation

This table compares Sprouts Farmers Market and Andersons”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sprouts Farmers Market	$9.11 billion	0.49	$523.67 million	$5.21	9.38
Andersons	$11.01 billion	0.17	$95.71 million	$5.95	9.16

Sprouts Farmers Market has higher earnings, but lower revenue than Andersons. Andersons is trading at a lower price-to-earnings ratio than Sprouts Farmers Market, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Sprouts Farmers Market has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500. Comparatively, Andersons has a beta of 0.63, suggesting that its share price is 37% less volatile than the S&P 500.

Summary

Sprouts Farmers Market beats Andersons on 8 of the 15 factors compared between the two stocks.

About Sprouts Farmers Market

Sprouts Farmers Market, Inc. is a specialty grocery retailer focused on fresh, natural and organic foods. Its stores offer produce, meat and seafood, bakery and deli items, vitamins and supplements, and packaged grocery products, including the company’s own brands. The company was founded in 2002 and is headquartered in Phoenix, Arizona. Its stores serve communities across the United States, with a footprint concentrated in the Sunbelt and extending into other regions. Sprouts emphasizes fresh foods and products for customers seeking natural, organic and health-oriented options, combining grocery departments with a market-style store format.

About Andersons

The Andersons, Inc. is an agribusiness company based in Maumee, Ohio. Founded in 1947, it began as a grain business and has expanded into grain trading and handling, renewable fuels, plant nutrients and specialty industrial products. The company merchandises and stores grain and provides related logistics services. Its operations also include producing and marketing ethanol and its co-products, as well as manufacturing and distributing fertilizers and other nutrient and industrial products. The Andersons serves agricultural and industrial customers in North America and participates in markets beyond the region through its grain and commodity activities.