Critical Analysis: Monro Muffler Brake (NASDAQ:MNRO) vs. Where Food Comes From (NASDAQ:WFCF)

Where Food Comes From (NASDAQ:WFCF) and Monro Muffler Brake (NASDAQ:MNRO) are both small-cap consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, profitability, risk, earnings, institutional ownership, analyst recommendations and dividends.

Valuation and Earnings

This table compares Where Food Comes From and Monro Muffler Brake”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Where Food Comes From	$25.75 million	2.14	$2.12 million	$0.37	28.46
Monro Muffler Brake	$1.20 billion	0.37	-$5.18 million	($0.20)	-73.70

Where Food Comes From has higher earnings, but lower revenue than Monro Muffler Brake. Monro Muffler Brake is trading at a lower price-to-earnings ratio than Where Food Comes From, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Where Food Comes From and Monro Muffler Brake’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Where Food Comes From	7.76%	17.60%	10.59%
Monro Muffler Brake	-0.43%	2.43%	0.93%

Volatility and Risk

Where Food Comes From has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500. Comparatively, Monro Muffler Brake has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500.

Insider & Institutional Ownership

18.8% of Where Food Comes From shares are held by institutional investors. 50.3% of Where Food Comes From shares are held by insiders. Comparatively, 1.6% of Monro Muffler Brake shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and target prices for Where Food Comes From and Monro Muffler Brake, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Where Food Comes From	0	0	0	0	0.00
Monro Muffler Brake	0	1	2	0	2.67

Monro Muffler Brake has a consensus price target of $17.67, indicating a potential upside of 19.86%. Given Monro Muffler Brake’s stronger consensus rating and higher possible upside, analysts clearly believe Monro Muffler Brake is more favorable than Where Food Comes From.

Summary

Where Food Comes From beats Monro Muffler Brake on 9 of the 14 factors compared between the two stocks.

About Where Food Comes From

Where Food Comes From, Inc., together with its subsidiaries, operates as a third-party food verification company in North America. The company operates through Verification and Certification, and Professional Services segments. It conducts on-site and desk audits to verify that claims being made about livestock, food, other specialty crops, and agricultural and aquaculture products are accurate, as well as offers Where Food Comes From Source Verified retail and restaurant labeling program, which connects consumers directly to the source of the food they purchase through product labeling, and web-based information sharing and education. It also offers professional services and technology solutions; verification solutions; and consulting services, as well as sells hardware. The company serves beef and pork packers, organic producers and processors, and specialty retail chains. The company was formerly known as Integrated Management Information, Inc. and changed its name to Where Food Comes From, Inc. in December 2012. Where Food Comes From, Inc. was founded in 1996 and is based in Castle Rock, Colorado.

About Monro Muffler Brake

Monro, Inc. provides automotive undercar repair, and tire sales and services in the United States. It offers replacement tires and tire related services, automotive undercar repair services, and routine maintenance services primarily to passenger cars, light trucks, and vans. The company also provides other products and services for brakes; mufflers and exhaust systems; and steering, drive train, suspension, and wheel alignment. In addition, it operates stores under the brand names of Monro Auto Service and Tire Centers, Tire Choice Auto Service Centers, Mr. Tire Auto Service Centers, Car-X Tire & Auto, Tire Warehouse Tires for Less, Ken Towery's Tire & Auto Care, Mountain View Tire & Auto Service, and Tire Barn Warehouse. The company was founded in 1957 and is headquartered in Rochester, New York.