Flowers Foods (NYSE:FLO) versus Vital Farms (NASDAQ:VITL) Critical Comparison

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

Risk & Volatility

Vital Farms has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500. Comparatively, Flowers Foods has a beta of 0.38, suggesting that its share price is 62% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Vital Farms and Flowers Foods, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vital Farms	1	7	6	0	2.36
Flowers Foods	3	4	0	0	1.57

Vital Farms presently has a consensus target price of $16.45, indicating a potential upside of 72.84%. Flowers Foods has a consensus target price of $6.70, indicating a potential upside of 0.04%. Given Vital Farms’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Vital Farms is more favorable than Flowers Foods.

Earnings and Valuation

This table compares Vital Farms and Flowers Foods”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vital Farms	$759.44 million	0.54	$66.28 million	($0.55)	-17.31
Flowers Foods	$5.26 billion	0.27	$83.82 million	$0.26	25.76

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Vital Farms	0.02%	3.46%	2.25%
Flowers Foods	1.06%	14.91%	4.72%

Institutional and Insider Ownership

98.6% of Vital Farms shares are owned by institutional investors. Comparatively, 75.5% of Flowers Foods shares are owned by institutional investors. 3.9% of Vital Farms shares are owned by insiders. Comparatively, 7.2% of Flowers Foods shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

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

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.

About Flowers Foods

Flowers Foods, Inc. produces and markets packaged bakery food products in the United States. Its principal products include fresh breads, buns, rolls, snack items, bagels, English muffins, and tortillas, as well as frozen breads and rolls under the Nature's Own, Dave's Killer Bread, Wonder, Canyon Bakehouse, Mrs. Freshley's, and Tastykake brand names. The company distributes its products through a direct-store-delivery distribution and a warehouse delivery system, as well as operates bakeries. Its customers include national and regional restaurants, institutions and foodservice distributors, and retail in-store bakeries; wholesale distributors; mass merchandisers, supermarkets, vending outlets, and convenience stores; quick-serve chains, food wholesalers, institutions, dollar stores, and vending companies; and public health care, military commissaries, and prisons, and other governmental institutions. The company was formerly known as Flowers Industries and changed its name to Flowers Foods, Inc. in 2001. Flowers Foods, Inc. was founded in 1919 and is headquartered in Thomasville, Georgia.