Critical Contrast: McCormick & Company, Incorporated (NYSE:MKC) versus Vital Farms (NASDAQ:VITL)

McCormick & Company, Incorporated (NYSE:MKC) and Vital Farms (NASDAQ:VITL) are both consumer staples companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, profitability, valuation and risk.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for McCormick & Company, Incorporated and Vital Farms, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
McCormick & Company, Incorporated	1	7	5	0	2.31
Vital Farms	1	3	9	0	2.62

McCormick & Company, Incorporated currently has a consensus price target of $74.10, suggesting a potential upside of 29.06%. Vital Farms has a consensus price target of $45.00, suggesting a potential upside of 157.58%. Given Vital Farms’ stronger consensus rating and higher possible upside, analysts clearly believe Vital Farms is more favorable than McCormick & Company, Incorporated.

Volatility & Risk

McCormick & Company, Incorporated has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500. Comparatively, Vital Farms has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500.

Earnings and Valuation

This table compares McCormick & Company, Incorporated and Vital Farms”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
McCormick & Company, Incorporated	$6.84 billion	2.25	$789.40 million	$2.93	19.59
Vital Farms	$759.44 million	1.03	$66.28 million	$1.44	12.13

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

Insider and Institutional Ownership

79.7% of McCormick & Company, Incorporated shares are held by institutional investors. Comparatively, 98.6% of Vital Farms shares are held by institutional investors. 10.6% of McCormick & Company, Incorporated shares are held by company insiders. Comparatively, 21.3% of Vital Farms shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares McCormick & Company, Incorporated and Vital Farms’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
McCormick & Company, Incorporated	11.54%	14.27%	6.14%
Vital Farms	8.73%	20.69%	14.66%

Summary

Vital Farms beats McCormick & Company, Incorporated on 8 of the 14 factors compared between the two stocks.

About McCormick & Company, Incorporated

McCormick & Co., Inc. engages in the manufacturing, marketing, and distribution of spices, seasoning mixes, condiments, and other flavorful products to retail outlets, food manufacturers, and foodservice businesses. It operates through the Consumer and Flavor Solutions segments. The Consumer segment sells spices, seasonings, condiments, and sauces. The Flavor Solutions segment includes seasoning blends, spices and herbs, condiments, coating systems, and compound flavors. The company was founded by Willoughby M. McCormick in 1889 and is headquartered in Baltimore, MD.

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.