Simply Good Foods (SMPL) versus Pinnacle Foods (PF) Critical Review

Simply Good Foods (NASDAQ: SMPL) and Pinnacle Foods (NYSE:PF) are both consumer staples companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, earnings, risk, dividends and valuation.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Simply Good Foods and Pinnacle Foods, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Simply Good Foods 0 0 5 0 3.00
Pinnacle Foods 0 1 10 0 2.91

Simply Good Foods currently has a consensus target price of $15.80, indicating a potential upside of 13.02%. Pinnacle Foods has a consensus target price of $65.45, indicating a potential upside of 3.50%. Given Simply Good Foods’ stronger consensus rating and higher probable upside, analysts clearly believe Simply Good Foods is more favorable than Pinnacle Foods.

Dividends

Pinnacle Foods pays an annual dividend of $1.30 per share and has a dividend yield of 2.1%. Simply Good Foods does not pay a dividend. Pinnacle Foods pays out 51.0% of its earnings in the form of a dividend. Pinnacle Foods has increased its dividend for 4 consecutive years.

Insider and Institutional Ownership

75.4% of Simply Good Foods shares are owned by institutional investors. Comparatively, 97.8% of Pinnacle Foods shares are owned by institutional investors. 1.2% of Simply Good Foods shares are owned by company insiders. Comparatively, 1.4% of Pinnacle Foods shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Simply Good Foods and Pinnacle Foods’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Simply Good Foods $396.17 million 2.49 -$2.03 million N/A N/A
Pinnacle Foods $3.14 billion 2.40 $532.04 million $2.55 24.80

Pinnacle Foods has higher revenue and earnings than Simply Good Foods.

Profitability

This table compares Simply Good Foods and Pinnacle Foods’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Simply Good Foods 9.60% 2.72% 1.59%
Pinnacle Foods 17.93% 14.39% 4.83%

Summary

Pinnacle Foods beats Simply Good Foods on 10 of the 14 factors compared between the two stocks.

Simply Good Foods Company Profile

The Simply Good Foods Company develops, markets, and sells branded nutritional foods and snack products in North America and internationally. The company markets nutrition bars, ready-to-drink shakes, snacks, and confectionery products under the Atkins, SimplyProtein, Atkins Endulge, and Atkins Harvest Trail brand names. The company is headquartered in Denver, Colorado.

Pinnacle Foods Company Profile

Pinnacle Foods Inc. manufactures, markets, and distributes branded convenience food products in North America. It operates through four segments: Frozen, Grocery, Boulder, and Specialty. The Frozen segment offers frozen vegetables, frozen complete bagged meals, frozen prepared seafood, frozen and refrigerated bagels, frozen pizza, and full-calorie single-serve frozen dinners and entrées under the Birds Eye, Birds Eye Voila!, Van de Kamp's, Mrs. Paul's, Lender's, Celeste, Hungry-Man, and Aunt Jemima brand names. The Grocery segment provides cake/brownie mixes and frostings, cookie mixes, shelf-stable salad dressings, salad dressings, canned meat, table syrups, margarine/spread, pie and pastry fruit fillings, barbecue sauce, and shelf-stable pickles under the Duncan Hines, Vlasic, Wish-Bone, Western, Armour, Brooks, Nalley, Log Cabin, Mrs. Butterworth's, Smart Balance, Comstock, Wilderness, and Open Pit brands. The Boulder segment offers gluten-free products, natural frozen meal offerings, plant-based refrigerated and shelf-stable spreads, and plant-based protein frozen products under the Udi's, Glutino, EVOL, Earth Balance, and gardein brands. The Specialty segment provides snack products under the Hawaiian kettle style chips, Tim's Cascade, Snyder of Berlin, and Husman's brand names; and manufactures and distributes products primarily in the gluten-free, frozen meat substitutes, canned meat, and pie and pastry fruit filling categories, as well as engages in private label businesses. The company sells its products through supermarkets, grocery wholesalers and distributors, mass merchandisers, super centers, convenience stores, dollar stores, natural and organic food stores, drug stores, warehouse clubs, and e-commerce websites in the United States and Canada, as well as in military channels and foodservice locations. Pinnacle Foods Inc. is headquartered in Parsippany, New Jersey.

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