Lamb Weston Holdings (NYSE: LW) and Calavo Growers (NASDAQ:CVGW) are both consumer staples companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, dividends, analyst recommendations, valuation, profitabiliy, risk and institutional ownership.

Dividends

Lamb Weston Holdings pays an annual dividend of $0.75 per share and has a dividend yield of 1.7%. Calavo Growers pays an annual dividend of $0.90 per share and has a dividend yield of 1.2%. Calavo Growers pays out 39.1% of its earnings in the form of a dividend.

Profitability

This table compares Lamb Weston Holdings and Calavo Growers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lamb Weston Holdings N/A N/A N/A
Calavo Growers 3.99% 18.38% 11.73%

Insider & Institutional Ownership

78.0% of Lamb Weston Holdings shares are owned by institutional investors. Comparatively, 82.3% of Calavo Growers shares are owned by institutional investors. 9.9% of Calavo Growers shares are owned by company 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.

Valuation & Earnings

This table compares Lamb Weston Holdings and Calavo Growers’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Lamb Weston Holdings $3.11 billion 2.11 $578.70 million N/A N/A
Calavo Growers $1.01 billion 1.28 $75.09 million $2.30 31.96

Lamb Weston Holdings has higher revenue and earnings than Calavo Growers.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Lamb Weston Holdings and Calavo Growers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lamb Weston Holdings 0 3 4 1 2.75
Calavo Growers 0 0 3 0 3.00

Lamb Weston Holdings presently has a consensus target price of $44.25, suggesting a potential downside of 1.67%. Calavo Growers has a consensus target price of $78.67, suggesting a potential upside of 7.03%. Given Calavo Growers’ stronger consensus rating and higher probable upside, analysts plainly believe Calavo Growers is more favorable than Lamb Weston Holdings.

Summary

Calavo Growers beats Lamb Weston Holdings on 8 of the 15 factors compared between the two stocks.

Lamb Weston Holdings Company Profile

Lamb Weston Holdings, Inc. (Lamb Weston), is a supplier of frozen potato, sweet potato, appetizer and vegetable products to restaurants and retailers around the world. The Company’s segments include Global, Foodservice, Retail and Other. The Global segment includes operations associated with Lamb Weston’s business with large chain restaurant customers, whether those results are generated in the United States or abroad, as well as operations associated with retail and foodservice customers located outside of the United States and Canada. The Foodservice segment includes sales to a line of foodservice distribution customers in the United States and Canada. The Retail reporting segment includes sales to grocery, mass, club, and specialty retailers primarily in the United States. The Other segment includes the operations from Lamb Weston’s frozen vegetable business. It also includes the operations from Lamb Weston’s dairy business.

Calavo Growers Company Profile

Calavo Growers, Inc. operates in the avocado industry. The Company provides value-added fresh food. The Company distributes its products both domestically and internationally and internationally. It operates in three business segments: Fresh products, Calavo Foods and Renaissance Food Group, LLC (RFG). The Company is engaged in marketing and distributing avocados, prepared avocados and other perishable foods, which allows it to deliver an array of fresh and prepared food products to food distributors, produce wholesalers, supermarkets, convenience stores and restaurants on a worldwide basis. The Company procures avocados principally from California and Mexico. Through its various operating facilities, the Company sorts, packs, and/or ripens avocados, tomatoes and/or Hawaiian grown papayas; processes and packages fresh cut fruit and vegetables, salads, wraps, sandwiches, fresh snacking products and a range of behind-the-glass deli items, and produces and packages guacamole and salsa.

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