Critical Analysis: China Mengniu Dairy (OTCMKTS:CIADY) versus Lifeway Foods (NASDAQ:LWAY)

China Mengniu Dairy (OTCMKTS:CIADY) and Lifeway Foods (NASDAQ:LWAY) are both consumer staples companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Profitability

This table compares China Mengniu Dairy and Lifeway Foods’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
China Mengniu Dairy	N/A	N/A	N/A
Lifeway Foods	5.39%	14.20%	11.25%

Risk and Volatility

China Mengniu Dairy has a beta of 0.06, meaning that its share price is 94% less volatile than the S&P 500. Comparatively, Lifeway Foods has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500.

Valuation and Earnings

This table compares China Mengniu Dairy and Lifeway Foods”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
China Mengniu Dairy	$12.34 billion	0.66	$14.54 million	N/A	N/A
Lifeway Foods	$186.82 million	2.11	$9.02 million	$0.66	39.36

China Mengniu Dairy has higher revenue and earnings than Lifeway Foods.

Insider & Institutional Ownership

0.1% of China Mengniu Dairy shares are held by institutional investors. Comparatively, 36.4% of Lifeway Foods shares are held by institutional investors. 18.9% of Lifeway Foods shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings for China Mengniu Dairy and Lifeway Foods, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
China Mengniu Dairy	0	0	0	0	0.00
Lifeway Foods	0	1	0	0	2.00

Lifeway Foods has a consensus price target of $25.00, indicating a potential downside of 3.75%. Given Lifeway Foods’ stronger consensus rating and higher probable upside, analysts plainly believe Lifeway Foods is more favorable than China Mengniu Dairy.

Summary

Lifeway Foods beats China Mengniu Dairy on 9 of the 11 factors compared between the two stocks.

About China Mengniu Dairy

China Mengniu Dairy Company Limited, an investment holding company, engages in the manufacture and distribution of dairy products under the MENGNIU brand in the People's Republic of China and internationally. It operates through Liquid Milk Business, Ice Cream Business, Milk Formula Business, and Cheese Business, and Other segments. The Liquid Milk Business segment offers ultra-high temperature milk, milk beverages, yogurt, and fresh milk. The Ice Cream Business segment manufactures and distributes dairy-based ice cream. The Milk Formula Business segment manufactures and distributes milk powder. The Cheese Business segment is involved in manufacture and distribution of cheese. The Other segment engages in manufacture of raw materials for daily products; and trading business. It also produces and sells organic food and formula products for babies and toddlers; and provides commercial factoring and financing guarantee services. China Mengniu Dairy Company Limited was founded in 1999 and is based in Causeway Bay, Hong Kong.

About Lifeway Foods

Lifeway Foods, Inc. produces and markets probiotic-based products in the United States and internationally. Its primary product is drinkable kefir, a cultured dairy product in various organic and non-organic sizes, flavors, and types. The company offers European-style soft cheeses; cream and other products; ProBugs, a line of kefir products designed for children; drinkable yogurt; and fresh made butter and sour cream. It sells its products under the Lifeway, GlenOaks Farms, and Fresh Made brand names, as well as under private labels on behalf of customers primarily through direct sales force, brokers, and distributors. Lifeway Foods, Inc. was incorporated in 1986 and is based in Morton Grove, Illinois.