Contrasting Teavana (TEA) and Farmer Brothers (FARM)
Teavana (NYSE: TEA) and Farmer Brothers (NASDAQ:FARM) are both small-cap non-cyclical consumer goods & services companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.
This table compares Teavana and Farmer Brothers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
53.5% of Farmer Brothers shares are held by institutional investors. 9.2% of Farmer Brothers shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
This is a summary of recent ratings and price targets for Teavana and Farmer Brothers, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Farmer Brothers has a consensus target price of $38.50, suggesting a potential upside of 15.79%.
Earnings & Valuation
This table compares Teavana and Farmer Brothers’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Farmer Brothers||$541.50 million||1.03||$24.40 million||$1.31||25.38|
Farmer Brothers has higher revenue and earnings than Teavana. Teavana is trading at a lower price-to-earnings ratio than Farmer Brothers, indicating that it is currently the more affordable of the two stocks.
Farmer Brothers beats Teavana on 8 of the 8 factors compared between the two stocks.
Teavana Holdings, Inc. (Teavana) is a specialty retailer of loose-leaf teas, authentic artisanal teawares and other tea-related merchandise. As of January 30, 2011, the Company had more than 100 varieties of loose-leaf teas, teawares, such as handcrafted cast-iron, clay and ceramic teapots and other tea-related merchandise. The Company offers its loose-leaf teas and tea-related merchandise through its United States retail store base, online platform, and international and domestic franchise stores. As of January 30, 2011, the Company offered its products through 146 company-owned stores in 34 states and 15 franchised stores primarily in Mexico. In June 2012, the Company acquired Teaopia Limited. In December 2012, Starbucks Coffee Company acquired Teavana.
About Farmer Brothers
Farmer Bros. Co. is a national coffee roaster, wholesaler and distributor of coffee, tea and culinary products. The Company offers private brand and consumer-branded coffee products to small independent restaurants and foodservice operators, and institutional buyers. Its product line includes organic, Direct Trade, Direct Trade Verified Sustainable (DTVS) coffees and other coffees, iced and hot teas, cappuccino, spices, and baking/biscuit mixes. Its primary brands include Farmer Brothers, Artisan Collection by Farmer Brothers, Superior and Metropolitan. Its Artisan coffee products include Direct Trade, Fair Trade Certified, Rainforest Alliance Certified organic blends. It sells whole bean and roast and ground flavored and unflavored coffee products under the Un Momento, Collaborative Coffee, Cain’s and McGarvey brands at retail. Its roast and ground coffee products are sold in traditional packaging, including bags and fractional packages, as well as single-serve packaging.
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