Critical Contrast: United Natural Foods (NYSE:UNFI) vs. Flowers Foods (NYSE:FLO)

United Natural Foods (NYSE:UNFI) and Flowers Foods (NYSE:FLO) are both consumer staples companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, analyst recommendations, risk, earnings and dividends.

Institutional and Insider Ownership

87.6% of United Natural Foods shares are held by institutional investors. Comparatively, 75.4% of Flowers Foods shares are held by institutional investors. 2.1% of United Natural Foods shares are held by company insiders. Comparatively, 11.6% of Flowers Foods shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for United Natural Foods and Flowers Foods, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Natural Foods	0	7	2	0	2.22
Flowers Foods	0	3	0	0	2.00

United Natural Foods currently has a consensus price target of $28.13, indicating a potential downside of 1.95%. Flowers Foods has a consensus price target of $15.33, indicating a potential upside of 2.94%. Given Flowers Foods’ higher probable upside, analysts clearly believe Flowers Foods is more favorable than United Natural Foods.

Profitability

This table compares United Natural Foods and Flowers Foods’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Natural Foods	-0.21%	3.13%	0.66%
Flowers Foods	4.30%	17.85%	6.52%

Risk & Volatility

United Natural Foods has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500. Comparatively, Flowers Foods has a beta of 0.29, suggesting that its stock price is 71% less volatile than the S&P 500.

Earnings & Valuation

This table compares United Natural Foods and Flowers Foods”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Natural Foods	$30.98 billion	0.06	-$112.00 million	($1.15)	-24.94
Flowers Foods	$5.10 billion	0.62	$248.12 million	$1.04	14.32

Flowers Foods has lower revenue, but higher earnings than United Natural Foods. United Natural Foods is trading at a lower price-to-earnings ratio than Flowers Foods, indicating that it is currently the more affordable of the two stocks.

Summary

Flowers Foods beats United Natural Foods on 9 of the 14 factors compared between the two stocks.

About United Natural Foods

United Natural Foods, Inc., together with its subsidiaries, distributes natural, organic, specialty, produce, and conventional grocery and non-food products in the United States and Canada. It operates in two segments, Wholesale and Retail. The company offers grocery and general merchandise, produce, perishables and frozen foods, wellness and personal care items, and bulk and foodservice products. It also provides nuts, dried fruit, seeds, trail mixes, granola, natural and organic snack items, and confections under the Woodstock Farms Manufacturing name; organic, non-GMO project verified, and specialty food and non-food items under the Blue Marble brand name; pet food under the WILD HARVEST brand name; and various products under the ESSENTIAL EVERYDAY, SHOPPERS VALUE, Field Day, EQUALINE, CULINARY CIRCLE, and STONE RIDGE CREAMERY brand names. In addition, the company provides home, health and beauty care, and pharmacy products, as well as private label products through a network of Cub Foods and Shoppers retail grocery stores; and retail store support, pricing strategy, shelf and planogram management, advertising, couponing, ecommerce, consumer convenience, store design, equipment sourcing, electronic payments processing, network and data hosting, point-of-sale hardware and software, automation tools, sustainability, and administrative back-office solution services. Further, it offers consumer and trade marketing programs, and programs to support suppliers in understanding its markets. The company serves chains, independent retailers, and supernatural chains, as well as foodservice, ecommerce, conventional military business, and other sales customers. United Natural Foods, Inc. was founded in 1976 and is headquartered in Providence, Rhode Island.

About Flowers Foods

Flowers Foods, Inc. produces and markets packaged bakery food products in the United States. Its principal products include fresh breads, buns, rolls, snack items, bagels, English muffins, and tortillas, as well as frozen breads and rolls under the Nature's Own, Dave's Killer Bread, Wonder, Canyon Bakehouse, Mrs. Freshley's, and Tastykake brand names. The company distributes its products through a direct-store-delivery distribution and a warehouse delivery system, as well as operates bakeries. Its customers include national and regional restaurants, institutions and foodservice distributors, and retail in-store bakeries; wholesale distributors; mass merchandisers, supermarkets, vending outlets, and convenience stores; quick-serve chains, food wholesalers, institutions, dollar stores, and vending companies; and public health care, military commissaries, and prisons, and other governmental institutions. The company was formerly known as Flowers Industries and changed its name to Flowers Foods, Inc. in 2001. Flowers Foods, Inc. was founded in 1919 and is headquartered in Thomasville, Georgia.