Comparing Nomad Foods (NYSE:NOMD) and Lamb Weston (NYSE:LW)

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

Institutional and Insider Ownership

75.3% of Nomad Foods shares are held by institutional investors. Comparatively, 89.6% of Lamb Weston shares are held by institutional investors. 17.3% of Nomad Foods shares are held by insiders. Comparatively, 0.3% of Lamb Weston shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Volatility and Risk

Nomad Foods has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500. Comparatively, Lamb Weston has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500.

Earnings & Valuation

This table compares Nomad Foods and Lamb Weston”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nomad Foods	$3.05 billion	0.61	$245.74 million	$1.44	8.48
Lamb Weston	$6.45 billion	1.20	$357.20 million	$2.09	26.65

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

Dividends

Nomad Foods pays an annual dividend of $0.68 per share and has a dividend yield of 5.6%. Lamb Weston pays an annual dividend of $1.48 per share and has a dividend yield of 2.7%. Nomad Foods pays out 47.2% of its earnings in the form of a dividend. Lamb Weston pays out 70.8% 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. Nomad Foods has increased its dividend for 2 consecutive years and Lamb Weston has increased its dividend for 7 consecutive years. Nomad Foods is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Nomad Foods and Lamb Weston, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nomad Foods	1	1	3	0	2.40
Lamb Weston	1	8	4	1	2.36

Nomad Foods currently has a consensus price target of $18.67, indicating a potential upside of 52.82%. Lamb Weston has a consensus price target of $65.70, indicating a potential upside of 17.97%. Given Nomad Foods’ stronger consensus rating and higher possible upside, equities analysts plainly believe Nomad Foods is more favorable than Lamb Weston.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Nomad Foods	6.93%	10.26%	4.20%
Lamb Weston	4.56%	28.08%	6.47%

Summary

Lamb Weston beats Nomad Foods on 11 of the 18 factors compared between the two stocks.

About Nomad Foods

Nomad Foods Limited, together with its subsidiaries, manufactures, markets, and distributes a range of frozen food products in the United Kingdom and internationally. The company offers frozen fish products, including fish fingers, coated fish, and natural fish; ready-to-cook vegetable products, such as peas and spinach; and frozen poultry and meat products comprising nuggets, grills, and burgers. It also provides meal products that include ready-to-cook noodles, pasta, lasagna, pancakes, and other ready-made meals; ice creams, such as in-home and out-of-home ice creams; and other products consisting of soups, pizzas, bakery goods, and meat substitutes. The company sells its products to supermarkets and food retail chains primarily under the Birds Eye, Green Cuisine, iglo, Findus, Aunt Bessie's, Goodfella's, Frikom, Ledo, La Cocinera, and Belviva brand names. Nomad Foods Limited was founded in 2014 and is headquartered in Feltham, the United Kingdom.

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.