Head-To-Head Contrast: US Foods (NYSE:USFD) and Lamb Weston (NYSE:LW)

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

Institutional and Insider Ownership

89.6% of Lamb Weston shares are owned by institutional investors. Comparatively, 98.8% of US Foods shares are owned by institutional investors. 0.3% of Lamb Weston shares are owned by company insiders. Comparatively, 0.7% of US Foods shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Lamb Weston and US Foods”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lamb Weston	$6.45 billion	0.95	$357.20 million	$2.14	20.72
US Foods	$39.42 billion	0.52	$676.00 million	$2.94	31.74

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

Profitability

This table compares Lamb Weston and US Foods’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lamb Weston	4.61%	23.77%	5.76%
US Foods	1.71%	18.74%	6.09%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Lamb Weston and US Foods, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lamb Weston	1	9	3	0	2.15
US Foods	0	3	10	0	2.77

Lamb Weston presently has a consensus price target of $48.00, indicating a potential upside of 8.24%. US Foods has a consensus price target of $107.33, indicating a potential upside of 15.03%. Given US Foods’ stronger consensus rating and higher possible upside, analysts plainly believe US Foods is more favorable than Lamb Weston.

Risk and Volatility

Lamb Weston has a beta of 0.49, suggesting that its share price is 51% less volatile than the S&P 500. Comparatively, US Foods has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500.

Summary

US Foods beats Lamb Weston on 11 of the 14 factors compared between the two stocks.

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.

About US Foods

US Foods Holding Corp., together with its subsidiaries, engages in marketing, sale, and distribution of fresh, frozen, and dry food and non-food products to foodservice customers in the United States. The company's customers include independently owned single and multi-unit restaurants, regional concepts, national restaurant chains, hospitals, nursing homes, hotels and motels, country clubs, government and military organizations, colleges and universities, and retail locations. The company was formerly known as USF Holding Corp. and changed its name to US Foods Holding Corp. in February 2016. US Foods Holding Corp. was incorporated in 2007 and is headquartered in Rosemont, Illinois.