Head to Head Contrast: BAB (OTCMKTS:BABB) vs. Kraft Heinz (NASDAQ:KHC)

Kraft Heinz (NASDAQ:KHC) and BAB (OTCMKTS:BABB) are both 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 Kraft Heinz and BAB, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kraft Heinz	4	16	0	1	1.90
BAB	0	0	0	0	0.00

Kraft Heinz currently has a consensus price target of $25.21, suggesting a potential upside of 1.66%. Given Kraft Heinz’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Kraft Heinz is more favorable than BAB.

Dividends

Kraft Heinz pays an annual dividend of $1.60 per share and has a dividend yield of 6.5%. BAB pays an annual dividend of $0.04 per share and has a dividend yield of 4.0%. Kraft Heinz pays out -32.4% of its earnings in the form of a dividend. BAB pays out 50.0% 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. Kraft Heinz is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Kraft Heinz and BAB”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kraft Heinz	$24.94 billion	1.18	-$5.85 billion	($4.94)	-5.02
BAB	$3.44 million	2.10	$560,000.00	$0.08	12.44

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

Risk and Volatility

Kraft Heinz has a beta of 0.08, indicating that its share price is 92% less volatile than the S&P 500. Comparatively, BAB has a beta of 0.22, indicating that its share price is 78% less volatile than the S&P 500.

Institutional & Insider Ownership

78.2% of Kraft Heinz shares are owned by institutional investors. 0.4% of Kraft Heinz shares are owned by insiders. Comparatively, 33.7% of BAB shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Kraft Heinz and BAB’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kraft Heinz	-23.44%	7.07%	3.68%
BAB	16.25%	16.81%	11.65%

Summary

BAB beats Kraft Heinz on 9 of the 16 factors compared between the two stocks.

About Kraft Heinz

The Kraft Heinz Company, together with its subsidiaries, manufactures and markets food and beverage products in North America and internationally. Its products include condiments and sauces, cheese and dairy products, meals, meats, refreshment beverages, coffee, and other grocery products under the Kraft, Oscar Mayer, Heinz, Philadelphia, Lunchables, Velveeta, Ore-Ida, Maxwell House, Kool-Aid, Jell-O, Heinz, ABC, Master, Quero, Kraft, Golden Circle, Wattie's, Pudliszki, and Plasmon brands. It sells its products through its own sales organizations, as well as through independent brokers, agents, and distributors to chain, wholesale, cooperative, and independent grocery accounts; convenience, value, and club stores; pharmacies and drug stores; mass merchants; foodservice distributors; institutions, including hotels, restaurants, bakeries, hospitals, health care facilities, and government agencies; and online through various e-commerce platforms and retailers. The company was formerly known as H.J. Heinz Holding Corporation and changed its name to The Kraft Heinz Company in July 2015. The Kraft Heinz Company was founded in 1869 and is based in Pittsburgh, Pennsylvania.

About BAB

BAB, Inc. franchises and licenses bagel and muffin retail units under the Big Apple Bagels (BAB), My Favorite Muffin (MFM), and SweetDuet (SD) trade names in the United States. It's BAB franchised brand includes daily baked bagels, flavored cream cheeses, premium coffees, gourmet bagel sandwiches, and other related products; and MFM brand comprises various freshly baked muffins and coffees, as well as units operating as My Favorite Muffin Your All Day Bakery Café features specialty bagel sandwiches and related products. The company's SD brand includes frozen yogurt products. BAB, Inc. was founded in 1993 and is based in Deerfield, Illinois.