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

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

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
US Foods	$39.42 billion	0.54	$676.00 million	$2.94	32.87
Vital Farms	$606.31 million	2.01	$53.39 million	$1.32	20.58

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.

Risk and Volatility

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

Insider & Institutional Ownership

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

Profitability

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

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for US Foods and Vital Farms, as provided by MarketBeat.

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

US Foods currently has a consensus price target of $107.33, suggesting a potential upside of 11.07%. Vital Farms has a consensus price target of $49.91, suggesting a potential upside of 83.69%. Given Vital Farms’ stronger consensus rating and higher probable upside, 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 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.

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.