Critical Contrast: Simply Good Foods (NASDAQ:SMPL) & Tootsie Roll Industries (NYSE:TR)

Tootsie Roll Industries (NYSE:TR) and Simply Good Foods (NASDAQ:SMPL) are both mid-cap consumer staples companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, profitability, earnings, dividends and valuation.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Tootsie Roll Industries and Simply Good Foods, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tootsie Roll Industries	0	0	0	0	0.00
Simply Good Foods	0	3	5	0	2.63

Simply Good Foods has a consensus target price of $40.38, indicating a potential upside of 18.58%. Given Simply Good Foods’ stronger consensus rating and higher possible upside, analysts clearly believe Simply Good Foods is more favorable than Tootsie Roll Industries.

Profitability

This table compares Tootsie Roll Industries and Simply Good Foods’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tootsie Roll Industries	12.53%	10.29%	7.85%
Simply Good Foods	9.97%	10.29%	7.58%

Volatility and Risk

Tootsie Roll Industries has a beta of 0.4, indicating that its stock price is 60% less volatile than the S&P 500. Comparatively, Simply Good Foods has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500.

Earnings and Valuation

This table compares Tootsie Roll Industries and Simply Good Foods”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tootsie Roll Industries	$718.50 million	3.61	$86.83 million	$1.22	29.13
Simply Good Foods	$1.33 billion	2.57	$139.31 million	$1.43	23.81

Simply Good Foods has higher revenue and earnings than Tootsie Roll Industries. Simply Good Foods is trading at a lower price-to-earnings ratio than Tootsie Roll Industries, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

14.3% of Tootsie Roll Industries shares are owned by institutional investors. Comparatively, 88.5% of Simply Good Foods shares are owned by institutional investors. 60.8% of Tootsie Roll Industries shares are owned by insiders. Comparatively, 9.4% of Simply Good Foods shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Simply Good Foods beats Tootsie Roll Industries on 8 of the 13 factors compared between the two stocks.

About Tootsie Roll Industries

Tootsie Roll Industries, Inc., together with its subsidiaries, engages in the manufacture and sale of confectionery products in the United States, Canada, Mexico, and internationally. It sells its products under the Tootsie Roll, Tootsie Fruit Rolls, Frooties, Tootsie Pops, Tootsie Mini Pops, Child's Play, Caramel Apple Pops, Charms, Blow-Pop, Charms Mini Pops, Cella's, Dots, Junior Mints, Charleston Chew, Sugar Daddy, Sugar Babies, Andes, Fluffy Stuff, Dubble Bubble, Razzles, Cry Baby, NIK-L-NIP, and Tutsi Pop trademarks. The company sells its products directly to wholesale distributors of candy, and food and groceries; and supermarkets, variety stores, dollar stores, chain grocers, drug chains, discount chains, cooperative grocery associations, mass merchandisers, warehouse and membership club stores, vending machine operators, e-commerce merchants, the United States military, and fund-raising charitable organizations, as well as through food and grocery brokers. Tootsie Roll Industries, Inc. was founded in 1896 and is headquartered in Chicago, Illinois.

About Simply Good Foods

The Simply Good Foods Company operates as a consumer-packaged food and beverage company in North America and internationally. The company develops, markets, and sells snacks and meal replacements. It offers protein bars, ready-to-drink shakes, sweet and salty snacks, cookies, protein chips, and recipes under the Atkins and Quest brand names. The company also provides confectionery products, such as full-size and mini peanut butter cups, and fudgey brownie and gooey caramel candy bites, chocolatey coated peanut candies, and coconutty caramel candy bars under Atkins Endulge brand name.It distributes its products to various retail channels, such as mass merchandise, grocery and drug channels, club stores, convenience stores, gas stations, and other channels. The company also sells its products through e-commerce channels, including questnutrition.com, atkins.com, amazon.com and others. The Simply Good Foods Company was founded in 2017 and is headquartered in Denver, Colorado.