Vital Farms (NASDAQ:VITL) versus Medifast (NYSE:MED) Critical Comparison

Medifast (NYSE:MED) and Vital Farms (NASDAQ:VITL) are both small-cap consumer staples companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, analyst recommendations, earnings, valuation and profitability.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Medifast and Vital Farms, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Medifast	1	1	0	0	1.50
Vital Farms	0	2	13	0	2.87

Medifast currently has a consensus price target of $16.50, suggesting a potential upside of 33.39%. Vital Farms has a consensus price target of $50.64, suggesting a potential upside of 47.63%. Given Vital Farms’ stronger consensus rating and higher possible upside, analysts plainly believe Vital Farms is more favorable than Medifast.

Insider and Institutional Ownership

95.5% of Medifast shares are owned by institutional investors. Comparatively, 98.6% of Vital Farms shares are owned by institutional investors. 2.9% of Medifast shares are owned by insiders. Comparatively, 21.3% of Vital Farms shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Medifast and Vital Farms’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Medifast	0.06%	-0.89%	-0.69%
Vital Farms	8.50%	20.19%	14.69%

Risk & Volatility

Medifast has a beta of 0.48, meaning that its stock price is 52% less volatile than the S&P 500. Comparatively, Vital Farms has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500.

Valuation and Earnings

This table compares Medifast and Vital Farms”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Medifast	$602.46 million	0.23	$2.09 million	$0.01	1,237.00
Vital Farms	$606.31 million	2.53	$53.39 million	$1.32	25.98

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

Summary

Vital Farms beats Medifast on 13 of the 14 factors compared between the two stocks.

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.

About Vital Farms

Vital Farms, Inc., a food company, provides pasture-raised products in the United States. It offers shell eggs, butter, hard-boiled eggs, and liquid whole eggs. The company was founded in 2007 and is headquartered in Austin, Texas.