Critical Review: Krispy Kreme (NASDAQ:DNUT) vs. BBB Foods (NYSE:TBBB)

Krispy Kreme (NASDAQ:DNUT) and BBB Foods (NYSE:TBBB) are both consumer staples companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.

Profitability

This table compares Krispy Kreme and BBB Foods’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Krispy Kreme	-33.36%	-4.34%	-1.15%
BBB Foods	-3.95%	-82.15%	-12.44%

Volatility & Risk

Krispy Kreme has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500. Comparatively, BBB Foods has a beta of 0.02, suggesting that its share price is 98% less volatile than the S&P 500.

Institutional and Insider Ownership

81.7% of Krispy Kreme shares are owned by institutional investors. Comparatively, 8.4% of BBB Foods shares are owned by institutional investors. 3.0% of Krispy Kreme shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Krispy Kreme and BBB Foods”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Krispy Kreme	$1.52 billion	0.37	-$515.77 million	($2.99)	-1.10
BBB Foods	$4.08 billion	1.02	-$148.23 million	($1.55)	-23.00

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

Analyst Ratings

This is a summary of recent recommendations for Krispy Kreme and BBB Foods, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Krispy Kreme	3	1	3	1	2.25
BBB Foods	2	2	4	0	2.25

Krispy Kreme presently has a consensus target price of $4.63, suggesting a potential upside of 41.01%. BBB Foods has a consensus target price of $42.50, suggesting a potential upside of 19.19%. Given Krispy Kreme’s higher probable upside, equities research analysts clearly believe Krispy Kreme is more favorable than BBB Foods.

Summary

Krispy Kreme beats BBB Foods on 8 of the 14 factors compared between the two stocks.

About Krispy Kreme

Krispy Kreme, Inc., together with its subsidiaries, produces doughnuts in the United States, the United Kingdom, Ireland, Australia, New Zealand, Mexico, Canada, Japan, and internationally. The company operates through three segments: U.S., International, and Market Development. The company offers doughnut experiences through hot light theater and fresh shops, delivered fresh daily branded cabinets and merchandising units within grocery and convenience stores, quick service restaurants, club memberships, drug stores, and ecommerce, as well as through its branded sweet treat line comprising Krispy Kreme branded sweet treats. It also provides cookies under the Insomnia Cookies brand, cookie cakes, ice cream, cookie-wiches, and brownies; and operates Krispy Kreme company-owned shops and franchise shops. The company was formerly known as Krispy Kreme Doughnuts, Inc. and changed its name to Krispy Kreme, Inc. in May 2021. Krispy Kreme, Inc. was founded in 1937 and is based in Charlotte, North Carolina.

About BBB Foods

BBB Foods Inc., through its subsidiaries, operates a chain of grocery retail stores in Mexico. It offers household cleaning, personal hyenine, cosmetics and beauty, pharmacy, and general merchandise products, as well as jellies and desserts, foods and drinks, pet supplies, coffee, tea, chocolates, breads, dry and frozen foods, snacks and sweets, and toilet papers and napkins. The company also provides branded, private label, and spot products. It serves low-to-middle income households through online channels. BBB Foods Inc. was incorporated in 2004 and is headquartered in Mexico City, Mexico.