Karat Packaging (NASDAQ:KRT) and Latham Group (NASDAQ:SWIM) Critical Survey

Latham Group (NASDAQ:SWIMGet Rating) and Karat Packaging (NASDAQ:KRTGet Rating) are both small-cap construction companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, profitability, institutional ownership, valuation and earnings.

Insider & Institutional Ownership

24.7% of Latham Group shares are owned by institutional investors. Comparatively, 19.7% of Karat Packaging shares are owned by institutional investors. 7.6% of Latham Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and target prices for Latham Group and Karat Packaging, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Latham Group 0 2 5 0 2.71
Karat Packaging 0 0 1 0 3.00

Latham Group presently has a consensus target price of $18.57, indicating a potential upside of 89.89%. Karat Packaging has a consensus target price of $31.00, indicating a potential upside of 68.85%. Given Latham Group’s higher possible upside, equities research analysts clearly believe Latham Group is more favorable than Karat Packaging.

Valuation and Earnings

This table compares Latham Group and Karat Packaging’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Latham Group $630.46 million 1.85 -$62.35 million ($0.66) -14.82
Karat Packaging $364.24 million 1.00 $20.78 million $1.31 14.02

Karat Packaging has lower revenue, but higher earnings than Latham Group. Latham Group is trading at a lower price-to-earnings ratio than Karat Packaging, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Latham Group and Karat Packaging’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Latham Group -10.95% 1.61% 0.71%
Karat Packaging 6.51% 19.84% 11.96%

Summary

Karat Packaging beats Latham Group on 7 of the 13 factors compared between the two stocks.

Latham Group Company Profile (Get Rating)

Latham Group, Inc. designs, manufactures, and markets in-ground residential swimming pools in North America, Australia, and New Zealand. It offers a portfolio of pools and related products, including in-ground swimming pools, pool covers, and pool liners. The company was formerly known as Latham Topco, Inc. and changed its name to Latham Group, Inc. in March 2021. Latham Group, Inc. was incorporated in 2018 and is headquartered in Latham, New York.

Karat Packaging Company Profile (Get Rating)

Karat Packaging Inc. manufactures and distributes single-use disposable products in plastic, paper, biopolymer-based, and other compostable forms used in various restaurant and foodservice settings. It provides food and take-out containers, bags, tableware, cups, lids, cutlery, straws, specialty beverage ingredients, equipment, gloves, and other products under the Karat Earth brand. The company offers its products to domestic and regional distributors, restaurant chains, retail establishments, and online customers. It also provides new product development, design, printing, and logistics services. Karat Packaging Inc. was founded in 2000 and is based in Chino, California.

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