Vital Farms (NASDAQ:VITL) and US Foods (NYSE:USFD) Financial Analysis

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

Institutional & Insider Ownership

98.6% of Vital Farms shares are held by institutional investors. Comparatively, 98.8% of US Foods shares are held by institutional investors. 21.3% of Vital Farms shares are held by insiders. Comparatively, 0.6% of US Foods shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Vital Farms has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500. Comparatively, US Foods has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Vital Farms	8.50%	20.19%	14.69%
US Foods	1.71%	18.74%	6.09%

Earnings & Valuation

This table compares Vital Farms and US Foods”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vital Farms	$606.31 million	2.10	$53.39 million	$1.32	21.52
US Foods	$39.42 billion	0.56	$676.00 million	$2.94	33.99

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Vital Farms and US Foods, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vital Farms	0	2	12	0	2.86
US Foods	0	2	10	0	2.83

Vital Farms currently has a consensus price target of $49.91, suggesting a potential upside of 75.67%. US Foods has a consensus price target of $107.33, suggesting a potential upside of 7.42%. Given Vital Farms’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Vital Farms is more favorable than US Foods.

Summary

Vital Farms beats US Foods on 9 of the 14 factors compared between the two stocks.

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.

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.