Campbell’s (NASDAQ:CPB) versus Marzetti (NASDAQ:MZTI) Critical Contrast

Campbell’s (NASDAQ:CPB) and Marzetti (NASDAQ:MZTI) are both mid-cap consumer staples companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Profitability

This table compares Campbell’s and Marzetti’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Campbell’s	6.12%	18.04%	4.74%
Marzetti	9.06%	18.12%	14.01%

Valuation & Earnings

This table compares Campbell’s and Marzetti”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Campbell’s	$10.25 billion	0.65	$602.00 million	$2.02	11.07
Marzetti	$1.91 billion	1.59	$167.35 million	$6.39	17.33

Campbell’s has higher revenue and earnings than Marzetti. Campbell’s is trading at a lower price-to-earnings ratio than Marzetti, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Campbell’s has a beta of 0.02, indicating that its share price is 98% less volatile than the S&P 500. Comparatively, Marzetti has a beta of 0.32, indicating that its share price is 68% less volatile than the S&P 500.

Dividends

Campbell’s pays an annual dividend of $1.56 per share and has a dividend yield of 7.0%. Marzetti pays an annual dividend of $4.00 per share and has a dividend yield of 3.6%. Campbell’s pays out 77.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Marzetti pays out 62.6% of its earnings in the form of a dividend. Marzetti has raised its dividend for 62 consecutive years.

Analyst Recommendations

This is a summary of recent ratings and price targets for Campbell’s and Marzetti, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Campbell’s	8	12	0	0	1.60
Marzetti	1	2	1	0	2.00

Campbell’s presently has a consensus price target of $22.00, indicating a potential downside of 1.65%. Marzetti has a consensus price target of $169.33, indicating a potential upside of 52.90%. Given Marzetti’s stronger consensus rating and higher possible upside, analysts plainly believe Marzetti is more favorable than Campbell’s.

Insider and Institutional Ownership

52.3% of Campbell’s shares are held by institutional investors. Comparatively, 66.4% of Marzetti shares are held by institutional investors. 19.8% of Campbell’s shares are held by company insiders. Comparatively, 29.1% of Marzetti shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Marzetti beats Campbell’s on 14 of the 17 factors compared between the two stocks.

About Campbell’s

The Campbell’s Company, formerly known as Campbell Soup Company, together with its subsidiaries, manufactures and markets food and beverage products in the United States and internationally. The company operates through Meals & Beverages and Snacks segments. The Meals & Beverages segment engages in the retail and foodservice businesses in the United States and Canada. This segment provides Campbell’s condensed and ready-to-serve soups; Swanson broth and stocks; Pacific Foods broth, soups, and non-dairy beverages; Prego pasta sauces; Pace Mexican sauces; Campbell’s gravies, pasta, beans, and dinner sauces; Swanson canned poultry; V8 juices and beverages; Campbell’s tomato juice; and snacking products in foodservice in Canada. The Snacks segment retails Pepperidge Farm cookies, crackers, fresh bakery, and frozen products, which include Goldfish crackers, Snyder’s of Hanover pretzels, Lance sandwich crackers, Cape Cod and Kettle Brand potato chips, Late July snacks, Snack Factory pretzel crisps, Pop Secret popcorn, and other snacking products. This segment is also involved in the retail business in Latin America. It sells its products through retail food chains, mass discounters and merchandisers, club stores, convenience stores, drug stores, and dollar stores, as well as e-commerce and other retail, commercial, and non-commercial establishments, and independent contractor distributors. The company was founded in 1869 and is headquartered in Camden, New Jersey.

About Marzetti

Lancaster Colony Corporation engages in the manufacturing and marketing of specialty food products for the retail and foodservice channels in the United States. It operates in two segments, Retail and Foodservice. The company offers frozen garlic bread under the New York BRAND Bakery; frozen Parkerhouse style yeast and dinner rolls under the Sister Schubert's brand; salad dressings under the Marzetti, Simply Dressed, Cardini's, and Girard's brands; vegetable and fruit dips under the Marzetti brand; croutons and salad toppings under the New York BRAND Bakery, Chatham Village, and Marzetti brands; and frozen pasta under the Marzetti Frozen Pasta brand. It also manufactures and sells other products to brand license agreements, including Olive Garden dressings, Buffalo Wild Wings sauces, and Chick-fil-A sauces. The company sells its products through sales personnel, food brokers, and distributors to retailers and restaurants. Lancaster Colony Corporation was incorporated in 1961 and is based in Westerville, Ohio.