Comparing Medifast (NYSE:MED) and Mama’s Creations (NASDAQ:MAMA)

Mama’s Creations (NASDAQ:MAMA) and Medifast (NYSE:MED) are both small-cap consumer staples companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, risk, analyst recommendations, profitability, valuation and dividends.

Profitability

This table compares Mama’s Creations and Medifast’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mama’s Creations	3.08%	20.22%	10.84%
Medifast	0.06%	-0.89%	-0.69%

Insider and Institutional Ownership

45.2% of Mama’s Creations shares are owned by institutional investors. Comparatively, 95.5% of Medifast shares are owned by institutional investors. 6.5% of Mama’s Creations shares are owned by insiders. Comparatively, 2.9% of Medifast shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Mama’s Creations and Medifast, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mama’s Creations	0	2	5	0	2.71
Medifast	1	1	0	0	1.50

Mama’s Creations currently has a consensus price target of $16.50, suggesting a potential upside of 15.22%. Medifast has a consensus price target of $16.50, suggesting a potential upside of 46.56%. Given Medifast’s higher possible upside, analysts plainly believe Medifast is more favorable than Mama’s Creations.

Earnings & Valuation

This table compares Mama’s Creations and Medifast”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mama’s Creations	$151.31 million	3.85	$3.71 million	$0.11	130.18
Medifast	$602.46 million	0.21	$2.09 million	$0.01	1,125.80

Mama’s Creations has higher earnings, but lower revenue than Medifast. Mama’s Creations is trading at a lower price-to-earnings ratio than Medifast, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Mama’s Creations has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500. Comparatively, Medifast has a beta of 0.48, meaning that its share price is 52% less volatile than the S&P 500.

Summary

Mama’s Creations beats Medifast on 10 of the 14 factors compared between the two stocks.

About Mama’s Creations

Mama’s Creations, Inc. engages in the marketing, manufacturing, and distribution of beef meatballs with sauce, turkey meatballs with sauce, beef meat loaf, sausage and peppers, chicken parmesan, and other similar meats and sauces. Its products include beef meatballs, turkey meatballs, stuffed meatballs, lasagna roll ups, retail ready meals, bulk deli, single-size pasta bowls, and packaged refrigerated products. Its brands include MamaMancini’s, Creative Salads, and The Olive Branch. The company was founded by Daniel Dougherty on July 22, 2009 and is headquartered in East Rutherford, NJ.

About Medifast

Medifast, Inc., through its subsidiaries, engages in the manufacture and sale of weight loss, weight management, and healthy living products in the United States and the Asia-Pacific. It offers bars, puffs, cereal, crunchers, drinks, hearty choices, oatmeal, pancakes, pudding, soft serve, shakes, smoothies, soft bakes, and soups under the OPTAVIA, OPTAVIA ACTIVE, and Optimal Health brand names. The company markets its products through point-of-sale transactions, as well as through ecommerce platform. Medifast, Inc. was founded in 1980 and is headquartered in Baltimore, Maryland.