Head to Head Review: Marzetti (NASDAQ:MZTI) and Medifast (NYSE:MED)

Medifast (NYSE:MED) and Marzetti (NASDAQ:MZTI) are both consumer staples companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, valuation, risk, institutional ownership, profitability and dividends.

Insider & Institutional Ownership

95.5% of Medifast shares are held by institutional investors. Comparatively, 66.4% of Marzetti shares are held by institutional investors. 2.9% of Medifast shares are held by company insiders. Comparatively, 29.1% of Marzetti shares are held by company 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.

Analyst Recommendations

This is a breakdown of recent recommendations for Medifast and Marzetti, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Medifast	1	1	0	0	1.50
Marzetti	0	3	1	0	2.25

Medifast currently has a consensus price target of $16.50, suggesting a potential upside of 45.05%. Marzetti has a consensus price target of $191.33, suggesting a potential upside of 11.72%. Given Medifast’s higher possible upside, equities analysts plainly believe Medifast is more favorable than Marzetti.

Earnings and Valuation

This table compares Medifast and Marzetti”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Medifast	$429.70 million	0.29	$2.09 million	$0.01	1,137.50
Marzetti	$1.94 billion	2.43	$167.35 million	$6.16	27.80

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

Risk and Volatility

Medifast has a beta of 0.82, suggesting that its stock price is 18% less volatile than the S&P 500. Comparatively, Marzetti has a beta of 0.4, suggesting that its stock price is 60% less volatile than the S&P 500.

Profitability

This table compares Medifast and Marzetti’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Medifast	0.76%	2.00%	1.50%
Marzetti	8.77%	18.87%	14.77%

Dividends

Medifast pays an annual dividend of $6.60 per share and has a dividend yield of 58.0%. Marzetti pays an annual dividend of $3.80 per share and has a dividend yield of 2.2%. Medifast pays out 66,000.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Marzetti pays out 61.7% of its earnings in the form of a dividend. Marzetti has raised its dividend for 62 consecutive years.

Summary

Marzetti beats Medifast on 12 of the 17 factors compared between the two stocks.

About Medifast

Medifast, Inc., through its subsidiaries, engages in the manufacture and sale of weight loss, weight management, and healthy living products in the United States and the Asia-Pacific. It offers bars, puffs, cereal, crunchers, drinks, hearty choices, oatmeal, pancakes, pudding, soft serve, shakes, smoothies, soft bakes, and soups under the OPTAVIA, OPTAVIA ACTIVE, and Optimal Health brand names. The company markets its products through point-of-sale transactions, as well as through ecommerce platform. Medifast, Inc. was founded in 1980 and is headquartered in Baltimore, Maryland.

About Marzetti

Lancaster Colony Corporation engages in the manufacturing and marketing of specialty food products for the retail and foodservice channels in the United States. It operates in two segments, Retail and Foodservice. The company offers frozen garlic bread under the New York BRAND Bakery; frozen Parkerhouse style yeast and dinner rolls under the Sister Schubert's brand; salad dressings under the Marzetti, Simply Dressed, Cardini's, and Girard's brands; vegetable and fruit dips under the Marzetti brand; croutons and salad toppings under the New York BRAND Bakery, Chatham Village, and Marzetti brands; and frozen pasta under the Marzetti Frozen Pasta brand. It also manufactures and sells other products to brand license agreements, including Olive Garden dressings, Buffalo Wild Wings sauces, and Chick-fil-A sauces. The company sells its products through sales personnel, food brokers, and distributors to retailers and restaurants. Lancaster Colony Corporation was incorporated in 1961 and is based in Westerville, Ohio.