Vital Farms (NASDAQ:VITL) vs. Freshpet (NASDAQ:FRPT) Critical Contrast

Freshpet (NASDAQ:FRPT) and Vital Farms (NASDAQ:VITL) are both consumer staples companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, earnings, institutional ownership and risk.

Valuation and Earnings

This table compares Freshpet and Vital Farms”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Freshpet	$975.18 million	3.23	$46.92 million	$2.29	28.17
Vital Farms	$606.31 million	2.41	$53.39 million	$1.32	24.69

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

Analyst Recommendations

This is a breakdown of recent ratings for Freshpet and Vital Farms, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Freshpet	2	10	6	0	2.22
Vital Farms	0	2	13	0	2.87

Freshpet presently has a consensus target price of $82.63, indicating a potential upside of 28.08%. Vital Farms has a consensus target price of $49.91, indicating a potential upside of 53.14%. Given Vital Farms’ stronger consensus rating and higher possible upside, analysts clearly believe Vital Farms is more favorable than Freshpet.

Insider and Institutional Ownership

98.6% of Vital Farms shares are owned by institutional investors. 4.4% of Freshpet shares are owned by company insiders. Comparatively, 21.3% of Vital Farms shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Freshpet	11.44%	5.73%	3.83%
Vital Farms	8.50%	20.19%	14.69%

Risk and Volatility

Freshpet has a beta of 1.72, indicating that its share price is 72% more volatile than the S&P 500. Comparatively, Vital Farms has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500.

Summary

Vital Farms beats Freshpet on 8 of the 14 factors compared between the two stocks.

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.

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.