Analyzing Performance Food Group (PFGC) and United Natural Foods (UNFI)

Performance Food Group (NYSE: PFGC) and United Natural Foods (NASDAQ:UNFI) are both mid-cap retail/wholesale companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, institutional ownership, risk and analyst recommendations.

Valuation and Earnings

This table compares Performance Food Group and United Natural Foods’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Performance Food Group $16.76 billion 0.17 $342.30 million $0.93 30.05
United Natural Foods $9.27 billion 0.22 $318.94 million $2.56 15.66

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

Insider & Institutional Ownership

78.7% of Performance Food Group shares are held by institutional investors. 3.7% of Performance Food Group shares are held by company insiders. Comparatively, 1.3% of United Natural Foods shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Performance Food Group and United Natural Foods, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Performance Food Group 0 6 5 0 2.45
United Natural Foods 4 9 5 0 2.06

Performance Food Group currently has a consensus price target of $29.00, indicating a potential upside of 3.76%. United Natural Foods has a consensus price target of $42.25, indicating a potential upside of 5.41%. Given United Natural Foods’ higher probable upside, analysts clearly believe United Natural Foods is more favorable than Performance Food Group.

Profitability

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

Net Margins Return on Equity Return on Assets
Performance Food Group 0.57% 14.73% 3.48%
United Natural Foods 1.40% 8.10% 4.50%

Volatility & Risk

Performance Food Group has a beta of -0.27, suggesting that its stock price is 127% less volatile than the S&P 500. Comparatively, United Natural Foods has a beta of 1.43, suggesting that its stock price is 43% more volatile than the S&P 500.

Summary

Performance Food Group beats United Natural Foods on 7 of the 13 factors compared between the two stocks.

Performance Food Group Company Profile

Performance Food Group Company, through its subsidiaries, markets and distributes food and food-related products. The Company operates through three segments: Performance Foodservice, PFG Customized and Vistar. The Performance Foodservice segment distributes a range of national brands, customer brands, and branded food and food-related products. It sells to independent or street, and multi-unit or chain, restaurants and other institutions. Its PFG Customized segment provides service to family and casual dining restaurant chains, and fast casual and quick service restaurant chains. Its Vistar segment specializes in distributing candy, snacks, beverages and other items nationally to the vending, office coffee service, theater, hospitality and other channels. Its products include a range of frozen foods, such as meats, fully prepared appetizers and entrees, and desserts; a range of canned and dry foods; fresh meats; dairy products; beverage products, and snack and other products.

United Natural Foods Company Profile

United Natural Foods, Inc. is a distributor and retailer of natural, organic and specialty products. The Company’s segments include Wholesale and Other. The Wholesale segment is engaged in the national distribution of natural, organic and specialty foods, produce and related products in the United States and Canada. The Other segment includes a retail division, which engages in the sale of natural foods and related products to the general public through retail storefronts on the east coast of the United States; a manufacturing division, which engages in importing, roasting and packaging of nuts, seeds, dried fruit and snack items, and its branded product lines. Its operations consist of three operating divisions: Wholesale Division, Retail Division, and Manufacturing and Branded Products divisions. As of July 30, 2016, the Company had offered 100,000 natural, organic and specialty foods, and non-food products, consisting of national, regional and private-label brands.

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