Comparing Darling Ingredients (NYSE:DAR) and Freshpet (NASDAQ:FRPT)

Freshpet (NASDAQ:FRPT) and Darling Ingredients (NYSE:DAR) are both consumer staples companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, profitability, earnings, analyst recommendations and risk.

Insider & Institutional Ownership

94.4% of Darling Ingredients shares are owned by institutional investors. 4.3% of Freshpet shares are owned by insiders. Comparatively, 1.9% of Darling Ingredients shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Freshpet has a beta of 1.66, indicating that its stock price is 66% more volatile than the S&P 500. Comparatively, Darling Ingredients has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Freshpet and Darling Ingredients, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Freshpet	1	7	10	0	2.50
Darling Ingredients	0	2	10	1	2.92

Freshpet presently has a consensus target price of $75.31, indicating a potential upside of 22.58%. Darling Ingredients has a consensus target price of $69.00, indicating a potential upside of 5.50%. Given Freshpet’s higher probable upside, analysts plainly believe Freshpet is more favorable than Darling Ingredients.

Profitability

This table compares Freshpet and Darling Ingredients’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Freshpet	17.28%	5.97%	4.07%
Darling Ingredients	9.13%	12.98%	6.08%

Earnings & Valuation

This table compares Freshpet and Darling Ingredients”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Freshpet	$1.10 billion	2.74	$139.14 million	$3.80	16.17
Darling Ingredients	$6.14 billion	1.68	$62.80 million	$3.71	17.63

Freshpet has higher earnings, but lower revenue than Darling Ingredients. Freshpet is trading at a lower price-to-earnings ratio than Darling Ingredients, indicating that it is currently the more affordable of the two stocks.

About Freshpet

Freshpet, Inc., together with its subsidiaries, manufactures, distributes, and markets natural fresh meals and treats for dogs and cats in the United States, Canada, and Europe. It sells dog food, cat food, and dog treats under the Freshpet brand name; and Dognation and Dog Joy labels through various classes of retail, including grocery, mass, club, pet specialty, and natural, as well as online. The company was incorporated in 2004 and is headquartered in Secaucus, New Jersey.

About Darling Ingredients

Darling Ingredients Inc. develops, produces, and sells natural ingredients from edible and inedible bio-nutrients in North America, Europe, China, South America, and internationally. The company operates through three segments: Feed Ingredients, Food Ingredients, and Fuel Ingredients. It offers ingredients and customized specialty solutions for customers in the pharmaceutical, food, pet food, feed, industrial, fuel, bioenergy, and fertilizer industries. The company also collects and transforms various animal by-product streams into useable and specialty ingredients, such as collagen, edible fats, feed-grade fats, animal proteins and meals, plasma, pet food ingredients, organic fertilizers, yellow grease, fuel feedstock, green energy, natural casings, and hides. In addition, it recovers and converts used cooking oil and animal fats, and residual bakery products into valuable feed and fuel ingredients. Further, the company provides environmental services, including grease trap collection and disposal services to food service establishments. It primarily operates under the Rendac, Sonac, FASA, Ecoson, Rousselot, Gelnex, and CTH brand names. The company was formerly known as Darling International Inc. and changed its name to Darling Ingredients Inc. in May 2014. Darling Ingredients Inc. was founded in 1882 and is headquartered in Irving, Texas.