Financial Analysis: George Weston (OTCMKTS:WNGRF) vs. Lamb Weston (NYSE:LW)

George Weston (OTCMKTS:WNGRF) and Lamb Weston (NYSE:LW) are both consumer staples companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, risk, earnings, analyst recommendations, institutional ownership and valuation.

Volatility and Risk

George Weston has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500. Comparatively, Lamb Weston has a beta of 0.51, suggesting that its share price is 49% less volatile than the S&P 500.

Institutional & Insider Ownership

0.0% of George Weston shares are held by institutional investors. Comparatively, 89.6% of Lamb Weston shares are held by institutional investors. 53.6% of George Weston shares are held by company insiders. Comparatively, 0.3% of Lamb Weston shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

George Weston pays an annual dividend of $0.86 per share and has a dividend yield of 1.3%. Lamb Weston pays an annual dividend of $1.48 per share and has a dividend yield of 2.7%. George Weston pays out 31.7% of its earnings in the form of a dividend. Lamb Weston pays out 70.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Lamb Weston has raised its dividend for 7 consecutive years. Lamb Weston is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for George Weston and Lamb Weston, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
George Weston	0	2	4	0	2.67
Lamb Weston	1	8	4	1	2.36

Lamb Weston has a consensus target price of $65.70, indicating a potential upside of 18.01%. Given Lamb Weston’s higher possible upside, analysts plainly believe Lamb Weston is more favorable than George Weston.

Profitability

This table compares George Weston and Lamb Weston’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
George Weston	1.67%	12.84%	3.29%
Lamb Weston	4.56%	28.08%	6.47%

Earnings & Valuation

This table compares George Weston and Lamb Weston”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
George Weston	$44.97 billion	0.57	$991.80 million	$2.71	24.75
Lamb Weston	$6.45 billion	1.20	$357.20 million	$2.09	26.64

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

Summary

Lamb Weston beats George Weston on 9 of the 17 factors compared between the two stocks.

About George Weston

George Weston Limited provides food and drug retailing, and financial services in Canada. The company operates through two segments, Loblaw Companies Limited (Loblaw) and Choice Properties Real Estate Investment Trust (Choice Properties). The Loblaw segment provides grocery, pharmacy and healthcare services, health and beauty products, apparel, general merchandise, and financial services. This segment also offers credit card and other banking services, insurance brokerage services, guaranteed investment certificates, and wireless mobile products and services. The Choice Properties segment owns, operates, manages, and develops retail commercial and residential properties, leased to necessity-based tenants, industrial, and mixed-use and residential assets. It markets its products under the Shoppers Drug Mart, Joe Fresh, President’s Choice Bank, no name, Farmer’s Market, T&T, Life Brand, and PC Optimum brands. The company was founded in 1882 and is based in Toronto, Canada. George Weston Limited operates as a subsidiary of Wittington Investments, Limited.

About Lamb Weston

Lamb Weston Holdings, Inc. produces, distributes, and markets frozen potato products worldwide. The company operates through four segments: Global, Foodservice, Retail, and Other. It offers frozen potatoes, commercial ingredients, and appetizers under the Lamb Weston brand, as well as under various customer labels. The company also provides its products under its owned or licensed brands, such as Grown in Idaho and Alexia, and other licensed brands, as well as under retailers' own brands. In addition, it engages in the vegetable and dairy businesses. The company sells its products through a network of internal sales personnel and independent brokers, agents, and distributors to chain restaurants, wholesale, grocery, mass merchants, club and specialty retailers, businesses, educational institutions, independent restaurants, regional chain restaurants, and convenience stores. Lamb Weston Holdings, Inc. was incorporated in 1950 and is headquartered in Eagle, Idaho.