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

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

Profitability

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

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

Volatility & Risk

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

Institutional & Insider Ownership

98.6% of Vital Farms shares are held by institutional investors. Comparatively, 41.0% of Hormel Foods shares are held by institutional investors. 3.9% of Vital Farms shares are held by insiders. Comparatively, 0.6% of Hormel Foods shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vital Farms	$759.44 million	0.57	$66.28 million	($0.55)	-18.20
Hormel Foods	$12.11 billion	1.01	$478.20 million	$0.63	35.21

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.

Analyst Ratings

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

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

Vital Farms presently has a consensus price target of $16.58, indicating a potential upside of 65.67%. Hormel Foods has a consensus price target of $25.43, indicating a potential upside of 14.63%. Given Vital Farms’ stronger consensus rating and higher possible upside, analysts clearly believe Vital Farms is more favorable than Hormel Foods.

Summary

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

About Vital Farms

Vital Farms, Inc. is a food company that produces and markets pasture-raised eggs and other ethically sourced food products. Its offerings include pasture-raised eggs, butter, hard-boiled eggs and ghee, sold under the Vital Farms brand. Founded in 2007, the company works with a network of family farms and focuses on animal welfare, outdoor access and supply-chain transparency. Vital Farms products are distributed primarily through grocery retailers and other food channels across the United States.

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.