Head to Head Analysis: Krispy Kreme Doughnuts (KKD) & US Foods (USFD)

Krispy Kreme Doughnuts (NYSE: KKD) and US Foods (NYSE:USFD) are both non-cyclical consumer goods & services companies, but which is the better stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, risk, dividends and earnings.

Profitability

This table compares Krispy Kreme Doughnuts and US Foods’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Krispy Kreme Doughnuts 6.90% 15.58% 11.41%
US Foods 1.11% 12.64% 3.61%

Insider & Institutional Ownership

96.9% of US Foods shares are held by institutional investors. 1.6% of US Foods shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Krispy Kreme Doughnuts and US Foods’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Krispy Kreme Doughnuts N/A N/A N/A $0.47 44.68
US Foods $22.92 billion 0.29 $209.79 million $1.17 25.41

US Foods has higher revenue and earnings than Krispy Kreme Doughnuts. US Foods is trading at a lower price-to-earnings ratio than Krispy Kreme Doughnuts, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Krispy Kreme Doughnuts and US Foods, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Krispy Kreme Doughnuts 0 0 0 0 N/A
US Foods 0 4 5 0 2.56

US Foods has a consensus target price of $33.38, indicating a potential upside of 12.26%. Given US Foods’ higher possible upside, analysts plainly believe US Foods is more favorable than Krispy Kreme Doughnuts.

Summary

US Foods beats Krispy Kreme Doughnuts on 6 of the 10 factors compared between the two stocks.

Krispy Kreme Doughnuts Company Profile

Krispy Kreme Doughnuts, Inc. is a retailer and wholesaler of doughnuts, complementary beverages, and treats and packaged sweets. The Company’s principal business includes owning and franchising Krispy Kreme stores, at which a range of doughnuts, including the Company’s Original Glazed doughnut, together with complementary products, including an array of coffees and other beverages. The Company operates through four business segments: Company Stores, Domestic Franchise, International Franchise and KK Supply Chain. The Company Stores segment includes the doughnut shops operated by the Company. The Domestic Franchise segment consists of the Company’s domestic store franchise operations and the licensing of Krispy Kreme products domestically. The International Franchise segment consists of the Company’s international store franchise operations. The KK Supply Chain segment produces doughnut mixes and manufactures doughnut-making equipment.

US Foods Company Profile

US Foods Holding Corp. is a holding company. The Company is a foodservice distributor in the United States. The Company, through US Foods, Inc. (USF), markets and primarily distributes fresh, frozen and dry food and non-food products to foodservice customers throughout the United States. These customers include independently owned single and multi-unit restaurants, regional concepts, national restaurant chains, hospitals, nursing homes, hotels and motels, country clubs, government and military organizations, colleges and universities, and retail locations. As of December 31, 2016, the Company provided approximately 400,000 fresh, frozen, and dry food stock-keeping units (SKUs), as well as non-food items, sourced from over 5,000 suppliers. As of January 31, 2017, it maintained 75 primary operating facilities, consisting of its 60 distribution centers and other supporting facilities.

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