Vital Farms (NASDAQ:VITL) and Freshpet (NASDAQ:FRPT) Critical Contrast

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

Institutional and Insider Ownership

98.6% of Vital Farms shares are held by institutional investors. 4.4% of Freshpet shares are held by insiders. Comparatively, 21.3% of Vital Farms shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Freshpet has a beta of 1.72, indicating that its share price is 72% more volatile than the S&P 500. Comparatively, Vital Farms has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Freshpet and Vital Farms, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Freshpet	1	11	6	0	2.28
Vital Farms	0	2	13	0	2.87

Freshpet currently has a consensus target price of $82.63, suggesting a potential upside of 37.41%. Vital Farms has a consensus target price of $49.91, suggesting a potential upside of 51.29%. Given Vital Farms’ stronger consensus rating and higher probable upside, analysts clearly believe Vital Farms is more favorable than Freshpet.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Freshpet	11.44%	5.73%	3.83%
Vital Farms	8.50%	20.19%	14.69%

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Freshpet	$975.18 million	3.01	$46.92 million	$2.29	26.26
Vital Farms	$711.88 million	2.07	$53.39 million	$1.32	24.99

Vital Farms has lower revenue, but higher earnings than Freshpet. Vital Farms is trading at a lower price-to-earnings ratio than Freshpet, indicating that it is currently the more affordable of the two stocks.

Summary

Vital Farms beats Freshpet on 8 of the 14 factors compared between the two stocks.

About Freshpet

Freshpet, Inc., together with its subsidiaries, manufactures, distributes, and markets natural fresh meals and treats for dogs and cats in the United States, Canada, and Europe. It sells dog food, cat food, and dog treats under the Freshpet brand name; and Dognation and Dog Joy labels through various classes of retail, including grocery, mass, club, pet specialty, and natural, as well as online. The company was incorporated in 2004 and is headquartered in Secaucus, New Jersey.

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.