Lifeway Foods (NASDAQ:LWAY) & Hormel Foods (NYSE:HRL) Head-To-Head Review

Hormel Foods (NYSE:HRL) and Lifeway Foods (NASDAQ:LWAY) are both consumer staples companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, dividends, valuation and analyst recommendations.

Institutional and Insider Ownership

41.0% of Hormel Foods shares are owned by institutional investors. Comparatively, 36.4% of Lifeway Foods shares are owned by institutional investors. 0.6% of Hormel Foods shares are owned by company insiders. Comparatively, 18.6% of Lifeway Foods shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Hormel Foods and Lifeway Foods”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hormel Foods	$12.11 billion	1.00	$478.20 million	$0.63	34.84
Lifeway Foods	$212.50 million	1.54	$13.86 million	$0.70	30.93

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

Volatility and Risk

Hormel Foods has a beta of 0.27, meaning that its stock price is 73% less volatile than the S&P 500. Comparatively, Lifeway Foods has a beta of 0.51, meaning that its stock price is 49% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Hormel Foods and Lifeway Foods, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hormel Foods	1	6	1	0	2.00
Lifeway Foods	0	1	2	1	3.00

Hormel Foods presently has a consensus price target of $25.43, indicating a potential upside of 15.86%. Lifeway Foods has a consensus price target of $34.00, indicating a potential upside of 57.04%. Given Lifeway Foods’ stronger consensus rating and higher probable upside, analysts plainly believe Lifeway Foods is more favorable than Hormel Foods.

Profitability

This table compares Hormel Foods and Lifeway Foods’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hormel Foods	2.82%	9.91%	5.89%
Lifeway Foods	4.48%	12.66%	9.29%

Summary

Lifeway Foods beats Hormel Foods on 11 of the 15 factors compared between the two stocks.

About Hormel Foods

Hormel Foods Corporation develops, processes, and distributes various meat, nuts, and other food products to retail, foodservice, deli, and commercial customers in the United States and internationally. It operates through three segments: Retail, Foodservice, and International segments. The company provides various perishable products that include fresh meats, frozen items, refrigerated meal solutions, sausages, hams, guacamoles, and bacons; and shelf-stable products comprising canned luncheon meats, nut butters, snack nuts, chili, shelf-stable microwaveable meals, hash, stews, tortillas, salsas, tortilla chips, nutritional food supplements, and others. It sells its products under the HORMEL, ALWAYS TENDER, APPLEGATE, AUSTIN BLUES, BACON 1, BLACK LABEL, BREAD READY, BURKE, CAFÉ H, CERATTI, CHI-CHI'S, COLUMBUS, COMPLEATS, CORN NUTS, CURE 81, DAN'S PRIZE, DI LUSSO, DINTY MOORE, DON MIGUEL, DOÑA MARIA, EMBASA, FAST N EASY, FIRE BRAISED, FONTANINI, HAPPY LITTLE PLANTS, HERDEZ, HORMEL GATHERINGS, HORMEL SQUARE TABLE, HORMEL VITAL CUISINE, HOUSE OF TSANG, JENNIE-O, JUSTIN'S, LA VICTORIA, LAYOUT, LLOYD'S, MARY KITCHEN, MR. PEANUT, NATURAL CHOICE, NUT-RITION, OLD SMOKEHOUSE, OVEN READY, PILLOW PACK, PLANTERS, ROSA GRANDE, SADLER'S SMOKEHOUSE, SKIPPY, SPAM, SPECIAL RECIPE, THICK & EASY, VALLEY FRESH, AND WHOLLY brands through sales personnel, independent brokers, and distributors. The company was formerly known as Geo. A. Hormel & Company and changed its name to Hormel Foods Corporation in January 1995. Hormel Foods Corporation was founded in 1891 and is headquartered in Austin, Minnesota.

About Lifeway Foods

Lifeway Foods, Inc. produces and markets probiotic-based products in the United States and internationally. Its primary product is drinkable kefir, a cultured dairy product in various organic and non-organic sizes, flavors, and types. The company offers European-style soft cheeses; cream and other products; ProBugs, a line of kefir products designed for children; drinkable yogurt; and fresh made butter and sour cream. It sells its products under the Lifeway, GlenOaks Farms, and Fresh Made brand names, as well as under private labels on behalf of customers primarily through direct sales force, brokers, and distributors. Lifeway Foods, Inc. was incorporated in 1986 and is based in Morton Grove, Illinois.