Farmer Brothers (NASDAQ:FARM – Get Free Report) and SpartanNash (NASDAQ:SPTN – Get Free Report) are both small-cap retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, profitability, institutional ownership, analyst recommendations, risk and valuation.
Volatility and Risk
Farmer Brothers has a beta of 1.46, indicating that its share price is 46% more volatile than the S&P 500. Comparatively, SpartanNash has a beta of 0.44, indicating that its share price is 56% less volatile than the S&P 500.
Insider & Institutional Ownership
64.5% of Farmer Brothers shares are held by institutional investors. Comparatively, 84.6% of SpartanNash shares are held by institutional investors. 4.6% of Farmer Brothers shares are held by insiders. Comparatively, 1.4% of SpartanNash shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Farmer Brothers | 0 | 0 | 1 | 0 | 3.00 |
| SpartanNash | 0 | 2 | 0 | 0 | 2.00 |
Farmer Brothers presently has a consensus price target of $4.50, suggesting a potential upside of 216.90%. SpartanNash has a consensus price target of $18.45, suggesting a potential downside of 30.56%. Given Farmer Brothers’ stronger consensus rating and higher probable upside, research analysts clearly believe Farmer Brothers is more favorable than SpartanNash.
Earnings & Valuation
This table compares Farmer Brothers and SpartanNash”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Farmer Brothers | $341.09 million | 0.09 | -$3.88 million | ($0.68) | -2.09 |
| SpartanNash | $9.55 billion | 0.09 | $300,000.00 | ($0.32) | -83.03 |
SpartanNash has higher revenue and earnings than Farmer Brothers. SpartanNash is trading at a lower price-to-earnings ratio than Farmer Brothers, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Farmer Brothers and SpartanNash’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Farmer Brothers | -4.20% | -26.00% | -6.06% |
| SpartanNash | -0.11% | 8.26% | 2.51% |
Summary
SpartanNash beats Farmer Brothers on 8 of the 14 factors compared between the two stocks.
About Farmer Brothers
Farmer Bros. Co. engages in the roasting, wholesale, equipment servicing, and distribution of coffee, tea, and other allied products in the United States. The company offers roast and ground coffee; frozen liquid coffee; flavoured and unflavoured iced and hot teas; culinary products, including spices, pancake and biscuit mixes, gravy and sauce mixes, soup bases, dressings, and syrups and sauces, as well as coffee filters, cups, sugar, and creamers; and other beverages comprising cappuccino, cocoa, granitas, and other blender-based beverages and concentrated and ready-to-drink cold brew and iced coffee. It also engage installation, repair, and refurbishment services for an array of coffee, tea, and juice equipment. The company serves small independent restaurants, foodservice operators, and large institutional buyers and national account customers. The company distributes its products through direct-store-delivery network, and common carriers or third-party distributors, as well as website. The company was founded in 1912 and is headquartered in Northlake, Texas.
About SpartanNash
SpartanNash Company distributes and retails grocery products in the United States of America. It operates through Wholesale and Retail segments. The Wholesale segment offers grocery products and perishable food products, including dry groceries, produce, dairy products, meat, delicatessen items, bakery goods, frozen food, seafood, floral products, general merchandise, beverages, tobacco products, health and beauty care, and pharmaceutical products to independent retailers, national accounts, food service distributors, e-commerce providers, and corporate owned retail stores. This segment offers various support services to independent retailers. The Retail segment operates retail stores, fuel centers, and pharmacies primarily under the banners of Family Fare, Martin’s Super Markets, D&W Fresh Market, VG’s Grocery, Family Fresh Market, Supermercado Nuestra Familia, Forest Hills Foods, Dillonvale IGA, and Fresh City Market. It supplies private brand products to military commissaries. The company was formerly known as Spartan Stores, Inc. and changed its name to SpartanNash Company in November 2013. SpartanNash Company was founded in 1917 and is headquartered in Grand Rapids, Michigan.
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