Comparing Fresh Del Monte Produce (NYSE:FDP) and Lamb Weston (NYSE:LW)

Lamb Weston (NYSE:LW) and Fresh Del Monte Produce (NYSE:FDP) are both consumer staples companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Dividends

Lamb Weston pays an annual dividend of $1.52 per share and has a dividend yield of 2.8%. Fresh Del Monte Produce pays an annual dividend of $1.20 per share and has a dividend yield of 3.9%. Lamb Weston pays out 83.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Fresh Del Monte Produce pays out 82.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Lamb Weston has raised its dividend for 7 consecutive years and Fresh Del Monte Produce has raised its dividend for 5 consecutive years. Fresh Del Monte Produce is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of current ratings for Lamb Weston and Fresh Del Monte Produce, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lamb Weston	1	8	3	1	2.31
Fresh Del Monte Produce	0	1	0	0	2.00

Lamb Weston presently has a consensus price target of $53.82, indicating a potential downside of 0.89%. Given Lamb Weston’s stronger consensus rating and higher probable upside, equities analysts plainly believe Lamb Weston is more favorable than Fresh Del Monte Produce.

Profitability

This table compares Lamb Weston and Fresh Del Monte Produce’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lamb Weston	3.85%	23.27%	5.70%
Fresh Del Monte Produce	1.63%	7.61%	4.89%

Volatility and Risk

Lamb Weston has a beta of 0.49, suggesting that its share price is 51% less volatile than the S&P 500. Comparatively, Fresh Del Monte Produce has a beta of 0.22, suggesting that its share price is 78% less volatile than the S&P 500.

Earnings & Valuation

This table compares Lamb Weston and Fresh Del Monte Produce”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lamb Weston	$6.61 billion	1.13	$290.00 million	$1.83	29.67
Fresh Del Monte Produce	$4.27 billion	0.34	$90.70 million	$1.45	21.06

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

Insider and Institutional Ownership

89.6% of Lamb Weston shares are owned by institutional investors. Comparatively, 64.8% of Fresh Del Monte Produce shares are owned by institutional investors. 1.0% of Lamb Weston shares are owned by company insiders. Comparatively, 30.6% of Fresh Del Monte Produce shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Lamb Weston beats Fresh Del Monte Produce on 14 of the 18 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 Fresh Del Monte Produce

Fresh Del Monte Produce Inc., through its subsidiaries, produces, markets, and distributes fresh and fresh-cut fruits and vegetables in North America, Central America, South America, Europe, the Middle East, Africa, Asia, and internationally. It operates through three segments: Fresh and Value-Added Products, Banana, and Other Products and Services. The company offers pineapples, fresh-cut fruit, fresh-cut vegetables, melons, and vegetables; non-tropical fruits, such as grapes, apples, citrus, blueberries, strawberries, pears, peaches, plums, nectarines, cherries, and kiwis; other fruit and vegetables, and avocados; and prepared fruit and vegetables, juices, other beverages, and meals and snacks. It also engages in the sale of poultry and meat products; and third-party freight services business. The company offers its products under the Del Monte brand, as well as under other brands, such as UTC, Rosy, Just Juice, Fruitini, Pinkglow, Del Monte Zero, Honeyglow, Rubyglow, Honey Miniglow, Bananinis, Mann, Mann’s Logo, Arcadian Harvest, Nourish Bowls, Broccolini, Caulilini, Better Burger Leaf, Romaleaf, and other regional brands. It markets and distributes its products to retail stores, club stores, convenience stores, wholesalers, distributors, and foodservice operators. Fresh Del Monte Produce Inc. was founded in 1886 and is based in George Town, Cayman Islands.