Lancaster Colony (NASDAQ: LANC) and Kraft Heinz (NASDAQ:KHC) are both consumer staples companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, valuation, profitability, earnings and institutional ownership.
Valuation & Earnings
This table compares Lancaster Colony and Kraft Heinz’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Lancaster Colony||$1.20 billion||2.81||$115.31 million||$4.62||26.59|
|Kraft Heinz||$26.23 billion||2.81||$11.00 billion||$3.55||17.05|
Lancaster Colony pays an annual dividend of $2.40 per share and has a dividend yield of 2.0%. Kraft Heinz pays an annual dividend of $2.50 per share and has a dividend yield of 4.1%. Lancaster Colony pays out 51.9% of its earnings in the form of a dividend. Kraft Heinz pays out 70.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Lancaster Colony has increased its dividend for 55 consecutive years.
This table compares Lancaster Colony and Kraft Heinz’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk & Volatility
Lancaster Colony has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500. Comparatively, Kraft Heinz has a beta of 0.59, suggesting that its stock price is 41% less volatile than the S&P 500.
This is a summary of recent ratings for Lancaster Colony and Kraft Heinz, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Lancaster Colony presently has a consensus price target of $153.00, indicating a potential upside of 24.56%. Kraft Heinz has a consensus price target of $83.47, indicating a potential upside of 37.87%. Given Kraft Heinz’s higher possible upside, analysts plainly believe Kraft Heinz is more favorable than Lancaster Colony.
Insider & Institutional Ownership
53.2% of Lancaster Colony shares are owned by institutional investors. Comparatively, 63.2% of Kraft Heinz shares are owned by institutional investors. 31.9% of Lancaster Colony shares are owned by company insiders. Comparatively, 26.8% of Kraft Heinz shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Lancaster Colony beats Kraft Heinz on 9 of the 17 factors compared between the two stocks.
Lancaster Colony Company Profile
Lancaster Colony Corporation manufactures and markets specialty food products for the retail and foodservice markets in the United States. It offers salad dressings and sauces under the Marzetti, Marzetti Simply Dressed, Cardini's, and Girard's brands; vegetable dips and fruit dips under the Marzetti brand; frozen garlic breads under the New York BRAND Bakery, Mamma Bella, and Mamma Bella's brands; and frozen Parkerhouse style yeast and dinner rolls under the Sister Schubert's and Mary B's brands. The company also provides dry egg noodles under the Inn Maid and Amish Kitchen brands; frozen specialty noodles under the Reames and Aunt Vi's brands; croutons and salad toppings under the New York BRAND Bakery, New York BRAND Bakery Texas Toast, Chatham Village, Cardini's, Marzetti Simply Dressed, and Marzetti brands; sprouted grain bakery products under the Angelic Bakehouse and Flatzza brands; flatbread wraps and pizza crusts under the Flatout brand; and caviar under the Romanoff brand name. In addition, it manufactures and sells other products to brand license agreements, including Olive Garden's dressings and Jack Daniel's mustards, as well as endorsement agreements, such as Hungry Girl flatbreads. The company's products are sold through sales personnel, food brokers, and distributors to retailers and restaurants, as well as to industrial customers. Lancaster Colony Corporation was founded in 1961 and is based in Westerville, Ohio.
Kraft Heinz Company Profile
The Kraft Heinz Company is a food and beverage company. The Company is engaged in the manufacturing and marketing of food and beverage products, including condiments and sauces, cheese and dairy, meals, meats, refreshment beverages, coffee and other grocery products. The Company’s segments include the United States, Canada and Europe. The Company’s remaining businesses are combined as Rest of World. The Rest of World consists of Latin America and Asia, Middle East and Africa (AMEA). The Company provides products for various occasions whether at home, in restaurants or on the go. The Company’s brands include Heinz, Kraft, Oscar Mayer, Philadelphia, Planters, Velveeta, Lunchables, Maxwell House, Capri Sun, and Ore-Ida. The Company’s products are sold through its own sales organizations and through independent brokers, agents and distributors to chain, wholesale, cooperative and independent grocery accounts, convenience stores, drug stores, value stores, bakeries and pharmacies.
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