Head-To-Head Analysis: J. M. Smucker (NYSE:SJM) vs. Lamb Weston (NYSE:LW)

J. M. Smucker (NYSE:SJM) and Lamb Weston (NYSE:LW) are both consumer staples companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, institutional ownership, profitability and dividends.

Valuation and Earnings

This table compares J. M. Smucker and Lamb Weston”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
J. M. Smucker	$9.16 billion	1.45	-$138.70 million	$2.14	58.26
Lamb Weston	$6.61 billion	1.03	$290.00 million	$2.08	23.78

Lamb Weston has lower revenue, but higher earnings than J. M. Smucker. Lamb Weston is trading at a lower price-to-earnings ratio than J. M. Smucker, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and recommmendations for J. M. Smucker and Lamb Weston, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
J. M. Smucker	0	8	10	0	2.56
Lamb Weston	0	11	3	0	2.21

J. M. Smucker presently has a consensus target price of $136.25, suggesting a potential upside of 9.29%. Lamb Weston has a consensus target price of $53.36, suggesting a potential upside of 7.87%. Given J. M. Smucker’s stronger consensus rating and higher possible upside, equities research analysts clearly believe J. M. Smucker is more favorable than Lamb Weston.

Volatility and Risk

J. M. Smucker has a beta of 0.27, indicating that its stock price is 73% less volatile than the S&P 500. Comparatively, Lamb Weston has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500.

Dividends

J. M. Smucker pays an annual dividend of $4.48 per share and has a dividend yield of 3.6%. Lamb Weston pays an annual dividend of $1.52 per share and has a dividend yield of 3.1%. J. M. Smucker pays out 209.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Lamb Weston pays out 73.1% of its earnings in the form of a dividend. J. M. Smucker has increased its dividend for 27 consecutive years and Lamb Weston has increased its dividend for 7 consecutive years. J. M. Smucker is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares J. M. Smucker and Lamb Weston’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
J. M. Smucker	2.51%	19.85%	6.76%
Lamb Weston	4.39%	23.33%	5.72%

Insider & Institutional Ownership

81.7% of J. M. Smucker shares are owned by institutional investors. Comparatively, 89.6% of Lamb Weston shares are owned by institutional investors. 2.8% of J. M. Smucker shares are owned by company insiders. Comparatively, 1.0% of Lamb Weston 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.

Summary

J. M. Smucker beats Lamb Weston on 11 of the 17 factors compared between the two stocks.

About J. M. Smucker

The J. M. Smucker Company manufactures and markets branded food and beverage products worldwide. It operates in three segments: U.S. Retail Pet Foods, U.S. Retail Coffee, and U.S. Retail Consumer Foods. The company offers mainstream roast, ground, single serve, and premium coffee; peanut butter and specialty spreads; fruit spreads, toppings, and syrups; jelly products; nut mix products; shortening and oils; frozen sandwiches and snacks; pet food and pet snacks; and foodservice hot beverage, foodservice portion control, and flour products, as well as dog and cat food, frozen handheld products, juices and beverages, and baking mixes and ingredients. It provides its products under the Meow Mix, Milk-Bone, Pup-Peroni, Canine Carry Outs, Folgers, Café Bustelo, Dunkin', Folgers, Café Bustelo, 1850, Jif, Smucker's, Smucker's Uncrustables, Robin Hood, and Five Roses. The company sells its products through direct sales and brokers to food retailers, club stores, discount and dollar stores, online retailers, pet specialty stores, natural foods stores and distributors, drug stores, military commissaries, and mass merchandisers. Smucker Company was founded in 1897 and is headquartered in Orrville, Ohio.

About Lamb Weston

Lamb Weston Holdings, Inc. produces, distributes, and markets frozen potato products worldwide. The company operates through four segments: Global, Foodservice, Retail, and Other. It offers frozen potatoes, commercial ingredients, and appetizers under the Lamb Weston brand, as well as under various customer labels. The company also provides its products under its owned or licensed brands, such as Grown in Idaho and Alexia, and other licensed brands, as well as under retailers' own brands. In addition, it engages in the vegetable and dairy businesses. The company sells its products through a network of internal sales personnel and independent brokers, agents, and distributors to chain restaurants, wholesale, grocery, mass merchants, club and specialty retailers, businesses, educational institutions, independent restaurants, regional chain restaurants, and convenience stores. Lamb Weston Holdings, Inc. was incorporated in 1950 and is headquartered in Eagle, Idaho.