Reviewing Flowers Foods (NYSE:FLO) and Freshpet (NASDAQ:FRPT)

Flowers Foods (NYSE:FLO) and Freshpet (NASDAQ:FRPT) are both mid-cap consumer staples companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, valuation, earnings, profitability, institutional ownership and dividends.

Volatility & Risk

Flowers Foods has a beta of 0.32, meaning that its stock price is 68% less volatile than the S&P 500. Comparatively, Freshpet has a beta of 1.77, meaning that its stock price is 77% more volatile than the S&P 500.

Profitability

This table compares Flowers Foods and Freshpet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Flowers Foods	4.49%	18.91%	7.28%
Freshpet	1.54%	3.16%	2.11%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Flowers Foods and Freshpet, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Flowers Foods	0	3	0	0	2.00
Freshpet	1	5	8	0	2.50

Flowers Foods currently has a consensus target price of $19.00, indicating a potential upside of 20.03%. Freshpet has a consensus target price of $119.14, indicating a potential upside of 80.93%. Given Freshpet’s stronger consensus rating and higher possible upside, analysts plainly believe Freshpet is more favorable than Flowers Foods.

Valuation & Earnings

This table compares Flowers Foods and Freshpet”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Flowers Foods	$5.10 billion	0.65	$248.12 million	$1.08	14.66
Freshpet	$975.18 million	3.29	$46.92 million	$0.31	212.42

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

Institutional and Insider Ownership

75.5% of Flowers Foods shares are held by institutional investors. 11.6% of Flowers Foods shares are held by insiders. Comparatively, 4.4% of Freshpet shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Flowers Foods beats Freshpet on 8 of the 14 factors compared between the two stocks.

About Flowers Foods

Flowers Foods, Inc. produces and markets packaged bakery food products in the United States. Its principal products include fresh breads, buns, rolls, snack items, bagels, English muffins, and tortillas, as well as frozen breads and rolls under the Nature's Own, Dave's Killer Bread, Wonder, Canyon Bakehouse, Mrs. Freshley's, and Tastykake brand names. The company distributes its products through a direct-store-delivery distribution and a warehouse delivery system, as well as operates bakeries. Its customers include national and regional restaurants, institutions and foodservice distributors, and retail in-store bakeries; wholesale distributors; mass merchandisers, supermarkets, vending outlets, and convenience stores; quick-serve chains, food wholesalers, institutions, dollar stores, and vending companies; and public health care, military commissaries, and prisons, and other governmental institutions. The company was formerly known as Flowers Industries and changed its name to Flowers Foods, Inc. in 2001. Flowers Foods, Inc. was founded in 1919 and is headquartered in Thomasville, Georgia.

About Freshpet

Freshpet, Inc., together with its subsidiaries, manufactures, distributes, and markets natural fresh meals and treats for dogs and cats in the United States, Canada, and Europe. It sells dog food, cat food, and dog treats under the Freshpet brand name; and Dognation and Dog Joy labels through various classes of retail, including grocery, mass, club, pet specialty, and natural, as well as online. The company was incorporated in 2004 and is headquartered in Secaucus, New Jersey.