Critical Analysis: John B. Sanfilippo & Son (NASDAQ:JBSS) and Vital Farms (NASDAQ:VITL)

John B. Sanfilippo & Son (NASDAQ:JBSS) and Vital Farms (NASDAQ:VITL) are both small-cap consumer staples companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, risk, earnings, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for John B. Sanfilippo & Son and Vital Farms, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
John B. Sanfilippo & Son	0	2	1	0	2.33
Vital Farms	1	5	8	0	2.50

John B. Sanfilippo & Son currently has a consensus price target of $109.00, suggesting a potential upside of 37.62%. Vital Farms has a consensus price target of $32.42, suggesting a potential upside of 244.02%. Given Vital Farms’ stronger consensus rating and higher probable upside, analysts clearly believe Vital Farms is more favorable than John B. Sanfilippo & Son.

Profitability

This table compares John B. Sanfilippo & Son and Vital Farms’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
John B. Sanfilippo & Son	5.76%	18.11%	10.88%
Vital Farms	8.73%	20.69%	14.66%

Insider & Institutional Ownership

70.6% of John B. Sanfilippo & Son shares are owned by institutional investors. Comparatively, 98.6% of Vital Farms shares are owned by institutional investors. 30.2% of John B. Sanfilippo & Son shares are owned by insiders. Comparatively, 21.3% of Vital Farms shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares John B. Sanfilippo & Son and Vital Farms”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
John B. Sanfilippo & Son	$1.11 billion	0.84	$58.93 million	$5.70	13.90
Vital Farms	$759.44 million	0.53	$66.28 million	$1.44	6.54

Vital Farms has lower revenue, but higher earnings than John B. Sanfilippo & Son. Vital Farms is trading at a lower price-to-earnings ratio than John B. Sanfilippo & Son, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

John B. Sanfilippo & Son has a beta of 0.38, indicating that its stock price is 62% less volatile than the S&P 500. Comparatively, Vital Farms has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500.

Summary

Vital Farms beats John B. Sanfilippo & Son on 9 of the 14 factors compared between the two stocks.

About John B. Sanfilippo & Son

John B. Sanfilippo & Son, Inc. engages in the processing and distribution of nuts and nut-related products. It offers peanuts, pecans, cashews, walnuts, almonds, and other nuts under the brands of Fisher, Orchard Valley Harvest, Squirrel Brand, and Southern Style Nuts. The company was founded by Gaspare Sanfilippo and John B. Sanfilippo in 1922 and is headquartered in Elgin, IL.

About Vital Farms

Vital Farms, Inc., a food company, provides pasture-raised products in the United States. It offers shell eggs, butter, hard-boiled eggs, and liquid whole eggs. The company was founded in 2007 and is headquartered in Austin, Texas.