Ajinomoto (OTCMKTS:AJINY) and Chefs’ Warehouse (NASDAQ:CHEF) Critical Survey

Chefs’ Warehouse (NASDAQ:CHEF) and Ajinomoto (OTCMKTS:AJINY) are both consumer staples companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, profitability, institutional ownership, valuation and earnings.

Analyst Ratings

This is a breakdown of current ratings and target prices for Chefs’ Warehouse and Ajinomoto, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chefs’ Warehouse	0	3	6	0	2.67
Ajinomoto	0	1	0	2	3.33

Chefs’ Warehouse presently has a consensus target price of $69.67, indicating a potential upside of 20.14%. Given Chefs’ Warehouse’s higher possible upside, equities research analysts clearly believe Chefs’ Warehouse is more favorable than Ajinomoto.

Valuation and Earnings

This table compares Chefs’ Warehouse and Ajinomoto”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chefs’ Warehouse	$3.79 billion	0.62	$55.48 million	$1.60	36.24
Ajinomoto	$10.05 billion	2.75	$463.80 million	$0.60	46.18

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

Volatility and Risk

Chefs’ Warehouse has a beta of 1.75, suggesting that its stock price is 75% more volatile than the S&P 500. Comparatively, Ajinomoto has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500.

Profitability

This table compares Chefs’ Warehouse and Ajinomoto’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chefs’ Warehouse	1.76%	13.60%	3.90%
Ajinomoto	N/A	N/A	N/A

Insider & Institutional Ownership

91.6% of Chefs’ Warehouse shares are owned by institutional investors. 11.5% of Chefs’ Warehouse shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Chefs’ Warehouse beats Ajinomoto on 9 of the 15 factors compared between the two stocks.

About Chefs’ Warehouse

The Chefs’ Warehouse, Inc., together with its subsidiaries, distributes specialty food and center-of-the-plate products in the United States, the Middle East, and Canada. The company’s product portfolio includes specialty food products, such as artisan charcuterie, specialty cheeses, unique oils and vinegars, truffles, caviar, chocolate, and pastry products; and center-of-the-plate products consisting of custom cut beef, seafood, and hormone-free poultry, as well as broadline food products comprising cooking oils, butter, eggs, milk, and flour. The company serves menu-driven independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolatiers, cruise lines, casinos, and specialty food stores. It markets its center-of-the-plate products directly to consumers through a mail and e-commerce platform. The Chefs’ Warehouse, Inc. was founded in 1985 and is headquartered in Ridgefield, Connecticut.

About Ajinomoto

Ajinomoto Co., Inc. engages in the seasonings and foods, frozen foods, and healthcare and other businesses in Japan and internationally. The Seasonings and Foods segment offers sauces and seasoning products under the AJI-NO-MOTO, HON-DASHI, Cook Do, Ajinomoto KK Consommé, Pure Select Mayonnaise, Ros Dee, Masako, Aji-ngon, Sazón, Sajiku, and CRISPY FRY names; and solutions and ingredients for foodservice and processed food manufacturers, processed foods, and restaurants, as well as industrial, retail, and other applications. This segment also provides instant noodles under the Knorr Cup Soup and YumYum names; coffee beverages under the Birdy and Blendy brands; powdered drink under the Birdy 3in1 name; MAXIM brand products; Chyotto Zeitakuna Kohiten brand products; and gift sets and office supplies comprising coffee vending machines, tea servers, etc. The Frozen Foods segment offers Chinese dumplings, cooked rice, noodles, desserts, shumai, processed chicken, and other products under the AJINOMOTO FRESH FROZEN, Bernardi, FRED’S, Golden Tiger, José Olé, LingLing, POSADA, and TAI PEI brands. The Healthcare and Other segment provides amino acids for applications in various industries, such as pharmaceuticals and foods; contract development and manufacturing services for pharmaceutical intermediates and active ingredients, aseptic fill finish services, etc.; personal care ingredients; and medical foods, crop services, etc. This segment also offers Ajinomoto Build-up Film, an interlayer insulating material for semiconductor packages; fundamental foods under the Glyna and Amino Aile names; sports nutrition supplements under the amino VITAL brand; and functional materials, such as activated carbon, release paper, etc. Ajinomoto Co., Inc. was founded in 1909 and is headquartered in Tokyo, Japan.