Royal Bank of Canada (NASDAQ: PENX) and Inventure Foods (NASDAQ:SNAK) are both small-cap food processing – nec companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, valuation, earnings, profitability, analyst recommendations, dividends and institutional ownership.

Insider and Institutional Ownership

71.0% of Inventure Foods shares are held by institutional investors. 6.4% of Inventure Foods shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Royal Bank of Canada and Inventure Foods’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Royal Bank of Canada 2.06% 8.92% 3.56%
Inventure Foods -34.84% -78.14% -7.19%

Earnings and Valuation

This table compares Royal Bank of Canada and Inventure Foods’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Royal Bank of Canada N/A N/A N/A $0.72 26.36
Inventure Foods $269.01 million 0.29 -$30.24 million ($3.39) -1.17

Royal Bank of Canada has higher revenue, but lower earnings than Inventure Foods. Inventure Foods is trading at a lower price-to-earnings ratio than Royal Bank of Canada, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Royal Bank of Canada has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500. Comparatively, Inventure Foods has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Royal Bank of Canada and Inventure Foods, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Royal Bank of Canada 0 0 0 0 N/A
Inventure Foods 0 2 0 0 2.00

Inventure Foods has a consensus target price of $8.00, indicating a potential upside of 101.51%. Given Inventure Foods’ higher possible upside, analysts clearly believe Inventure Foods is more favorable than Royal Bank of Canada.

Summary

Inventure Foods beats Royal Bank of Canada on 5 of the 9 factors compared between the two stocks.

About Royal Bank of Canada

Penford Corporation (Penford) is a developer, manufacturer and marketer of natural-based ingredient systems for food and industrial applications, including fuel grade ethanol. The Company has research and development capabilities, which are used in understanding the complex chemistry of carbohydrate-based materials and in developing applications to address customer needs. Penford operates in two business segments: Industrial Ingredients and Food Ingredients. Industrial Ingredients segment is a supplier of chemically modified starches to the paper and packaging industries. Industrial Ingredients also produces food grade corn starch for sale by the Company’s Food Ingredients business. Food Ingredients segment is a developer and manufacturer of specialty starches and dextrins to the food manufacturing and food service industries. This business is engaged is in leveraging the inherent characteristics from potato, corn, tapioca and rice to help improve its customers’ product performance.

About Inventure Foods

Inventure Foods, Inc. is a marketer and manufacturer of healthy/natural and indulgent specialty snack food brands. The Company operates in the snack products segment. The snack products segment produces potato chips, kettle chips, potato crisps, potato skins, pellet snacks, sheeted dough products and extruded products for sale primarily to snack food distributors and retailers. The products sold under its snack products segment includes products considered part of the indulgent specialty snack food category, as well as products considered part of the healthy/natural food category. Its Snack Products segment’s brands include Boulder Canyon, Nathan’s Famous, T.G.I. Friday’s, Poore Brothers, and Bob’s Texas Style.

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