Critical Comparison: BRF (NYSE:BRFS) and Chefs’ Warehouse (NASDAQ:CHEF)

BRF (NYSE:BRFS) and Chefs’ Warehouse (NASDAQ:CHEF) 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 risk, earnings, analyst recommendations, dividends, valuation, profitability and institutional ownership.

Insider & Institutional Ownership

4.8% of BRF shares are owned by institutional investors. Comparatively, 91.6% of Chefs’ Warehouse shares are owned by institutional investors. 1.0% of BRF shares are owned by insiders. Comparatively, 11.5% of Chefs’ Warehouse shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Risk & Volatility

BRF has a beta of 1.44, meaning that its stock price is 44% more volatile than the S&P 500. Comparatively, Chefs’ Warehouse has a beta of 1.75, meaning that its stock price is 75% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for BRF and Chefs’ Warehouse, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BRF	0	1	0	1	3.00
Chefs’ Warehouse	0	2	7	0	2.78

BRF presently has a consensus price target of $3.50, indicating a potential upside of 0.86%. Chefs’ Warehouse has a consensus price target of $69.67, indicating a potential upside of 25.66%. Given Chefs’ Warehouse’s higher probable upside, analysts plainly believe Chefs’ Warehouse is more favorable than BRF.

Profitability

This table compares BRF and Chefs’ Warehouse’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BRF	5.84%	20.20%	5.62%
Chefs’ Warehouse	1.76%	13.60%	3.90%

Valuation & Earnings

This table compares BRF and Chefs’ Warehouse”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BRF	$63.95 billion	0.06	$595.74 million	$0.38	9.13
Chefs’ Warehouse	$3.79 billion	0.60	$55.48 million	$1.60	34.65

BRF has higher revenue and earnings than Chefs’ Warehouse. BRF is trading at a lower price-to-earnings ratio than Chefs’ Warehouse, indicating that it is currently the more affordable of the two stocks.

Summary

Chefs’ Warehouse beats BRF on 8 of the 15 factors compared between the two stocks.

About BRF

BRF S.A. raises, produces, and slaughters poultry and pork for processing, production, and sale of fresh meat, processed products, pasta, margarine, pet food, and other products. The company provides frozen whole and cut chicken, frozen pork, and turkey, and halal products for Islamic markets; processed foods, such as marinated, frozen, seasoned whole, and cut chicken, roosters, sausages, ham products, bologna, frankfurters, salamis, bacons, cold meats, and other smoked products; and hamburgers, steaks, breaded meat products, kibbeh, and meatballs, as well as chicken sausages, hot dogs, and chicken bologna. It produces and sells lasagna, macaroni and cheese, pies, ready-to-eat meals, pizzas, and other frozen foods; plant-based products, such as nuggets, pies, vegetables, and burgers; frozen desserts and cheese bread; margarine, butter, cream cheese, sweet specialties, sandwiches, and pate, as well as soy meal, refined soy flour, animal feed, pet food and hatcheries. The company sells its products under the Sadia, Perdigão, Qualy, Sadia Halal, Chester, BRF Ingredients, Kidelli, Perdix, Borella, Hilal, Balance, Onefoods, Banvit, Deline, Sadia Bio, Sadia Salamitos, Sadia Veg&Tal, Sadia Livre&Lev, Sadia Hot Pocket, Perdigão Ouro, Chester Perdigão, Perdigão NaBrasa, Claybom, Biofresh, Three Dogs, Three Cats, and Gran Plus brands. It serves supermarkets, wholesalers, retail and wholesale stores, restaurants, and other institutional buyers. The company provides consultancy, administrative, marketing, and logistics services; generates and commercializes electric energy; distributes nutrients for animals; veterinary activities; road freight; and imports, exports, industrializes, and commercializes of products, as well as real estate. The company was formerly known as BRF-Brasil Foods S.A. and changed its name to BRF S.A. in April 2013. BRF S.A. was founded in 1934 and is headquartered in São Paulo, Brazil. BRF S.A. operates as a subsidiary of Marfrig Global Foods S.A.

About Chefs’ Warehouse

The Chefs’ Warehouse, Inc., together with its subsidiaries, distributes specialty food and center-of-the-plate products in the United States, the Middle East, and Canada. The company’s product portfolio includes specialty food products, such as artisan charcuterie, specialty cheeses, unique oils and vinegars, truffles, caviar, chocolate, and pastry products; and center-of-the-plate products consisting of custom cut beef, seafood, and hormone-free poultry, as well as broadline food products comprising cooking oils, butter, eggs, milk, and flour. The company serves menu-driven independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolatiers, cruise lines, casinos, and specialty food stores. It markets its center-of-the-plate products directly to consumers through a mail and e-commerce platform. The Chefs’ Warehouse, Inc. was founded in 1985 and is headquartered in Ridgefield, Connecticut.