Lamb Weston (NYSE:LW) & SunOpta (NASDAQ:STKL) Critical Analysis

Lamb Weston (NYSE:LW) and SunOpta (NASDAQ:STKL) are both consumer staples companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, dividends, risk and institutional ownership.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Lamb Weston and SunOpta, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lamb Weston	0	7	3	0	2.30
SunOpta	0	0	2	0	3.00

Lamb Weston currently has a consensus price target of $67.40, suggesting a potential upside of 26.91%. SunOpta has a consensus price target of $9.50, suggesting a potential upside of 73.36%. Given SunOpta’s stronger consensus rating and higher probable upside, analysts plainly believe SunOpta is more favorable than Lamb Weston.

Risk & Volatility

Lamb Weston has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500. Comparatively, SunOpta has a beta of 1.32, indicating that its share price is 32% more volatile than the S&P 500.

Profitability

This table compares Lamb Weston and SunOpta’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lamb Weston	5.54%	27.99%	6.43%
SunOpta	-1.90%	11.65%	2.65%

Institutional and Insider Ownership

89.6% of Lamb Weston shares are owned by institutional investors. Comparatively, 85.4% of SunOpta shares are owned by institutional investors. 0.7% of Lamb Weston shares are owned by insiders. Comparatively, 1.9% of SunOpta shares are owned by 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.

Valuation and Earnings

This table compares Lamb Weston and SunOpta”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lamb Weston	$6.45 billion	1.15	$357.20 million	$2.51	21.16
SunOpta	$723.73 million	0.89	-$17.39 million	($0.13)	-42.15

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

Summary

Lamb Weston beats SunOpta on 10 of the 14 factors compared between the two stocks.

About Lamb Weston

Lamb Weston Holdings, Inc. produces, distributes, and markets frozen potato products worldwide. The company operates through four segments: Global, Foodservice, Retail, and Other. It offers frozen potatoes, commercial ingredients, and appetizers under the Lamb Weston brand, as well as under various customer labels. The company also provides its products under its owned or licensed brands, such as Grown in Idaho and Alexia, and other licensed brands, as well as under retailers' own brands. In addition, it engages in the vegetable and dairy businesses. The company sells its products through a network of internal sales personnel and independent brokers, agents, and distributors to chain restaurants, wholesale, grocery, mass merchants, club and specialty retailers, businesses, educational institutions, independent restaurants, regional chain restaurants, and convenience stores. Lamb Weston Holdings, Inc. was incorporated in 1950 and is headquartered in Eagle, Idaho.

About SunOpta

SunOpta Inc. engages in manufacture and sale of plant-based and fruit-based food and beverage products in the United States, Canada, and internationally. The company provides plant-based beverages utilizing oat, almond, soy, coconut, rice, hemp, and other bases under the Dream and West Life brands; oat-based creamers under the SOWN brand; ready-to-drink protein shakes; and nut, grain, seed, and legume based beverages; packaged teas and concentrates; and meat and vegetable broths and stocks. It also offers plant-based ingredients, such as oatbase, oatgold, soybase, hempbase, and soypowders and okara; ready-to-eat fruit snacks made from apple purée and juice concentrate in bar, bit, twist, strip and sandwich formats; cold pressed fruit bars; liquid and powder ingredients utilizing oat, soy and hemp bases; ready-to-eat fruit smoothie and chia bowls topped with frozen fruit; consumer products, which includes protein shakes, teas, broths, and fruit snacks; and liquid and dry ingredients for internal use and for sale to other food and beverage manufacturers. It sells its products through various distribution channels including private label products to retail customers; branded products under co-manufacturing agreements to other branded food companies for their distribution; and its own branded products to retail and foodservice customers. The company was formerly known as Stake Technology Ltd. and changed its name to SunOpta Inc. in October 2003. SunOpta Inc. was incorporated in 1973 and is headquartered in Eden Prairie, Minnesota.