Leslie’s (NASDAQ:LESL) and WK Kellogg (NYSE:KLG) Head-To-Head Review

WK Kellogg (NYSE:KLG) and Leslie’s (NASDAQ:LESL) are both small-cap consumer staples companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, profitability, analyst recommendations, dividends and risk.

Risk & Volatility

WK Kellogg has a beta of 0.24, suggesting that its stock price is 76% less volatile than the S&P 500. Comparatively, Leslie’s has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for WK Kellogg and Leslie’s, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WK Kellogg	2	7	0	0	1.78
Leslie’s	1	9	0	0	1.90

WK Kellogg presently has a consensus target price of $20.88, suggesting a potential downside of 9.16%. Leslie’s has a consensus target price of $1.60, suggesting a potential upside of 374.78%. Given Leslie’s’ stronger consensus rating and higher probable upside, analysts clearly believe Leslie’s is more favorable than WK Kellogg.

Earnings and Valuation

This table compares WK Kellogg and Leslie’s”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WK Kellogg	$2.71 billion	0.73	$81.00 million	$0.37	62.11
Leslie’s	$1.33 billion	0.05	-$23.38 million	($0.45)	-0.75

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

Profitability

This table compares WK Kellogg and Leslie’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WK Kellogg	1.31%	31.34%	5.18%
Leslie’s	-6.72%	N/A	-4.96%

Insider & Institutional Ownership

95.7% of WK Kellogg shares are held by institutional investors. 2.2% of WK Kellogg shares are held by company insiders. Comparatively, 0.7% of Leslie’s shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

WK Kellogg beats Leslie’s on 10 of the 13 factors compared between the two stocks.

About WK Kellogg

WK Kellogg Co operates as a food company in the United States, Canada, and the Caribbean. It manufactures, markets, and distributes ready-to-eat cereal products primarily under the Frosted Flakes, Special K, Froot Loops, Raisin Bran, Frosted Mini-Wheats, and Kashi brands. The company was formerly known as North America Cereal Co. and changed its name to WK Kellogg Co in March 2023. The company was incorporated in 2022 and is headquartered in Battle Creek, Michigan.

About Leslie’s

Leslie’s, Inc. operates as a direct-to-consumer pool and spa care brand in the United States. The company markets and sells pool and spa supplies and related products and services. It also offers various pool and spa maintenance items, such as chemicals, equipment and parts, cleaning and maintenance equipment, safety, recreational, and fitness related products. In addition, the company provides installation and repair services for pool and spa equipment. It also sells its products through e-commerce websites and third-party marketplaces. The company offers complimentary, commercial-grade in-store, water testing, and analysis services. It serves the residential, professional, and commercial consumers. Leslie’s, Inc. was founded in 1963 and is based in Phoenix, Arizona.