Analyzing Medifast (NYSE:MED) and Vital Farms (NASDAQ:VITL)

Vital Farms (NASDAQ:VITL) and Medifast (NYSE:MED) are both small-cap consumer staples companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, dividends, analyst recommendations, earnings and institutional ownership.

Valuation & Earnings

This table compares Vital Farms and Medifast”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vital Farms	$606.31 million	2.38	$53.39 million	$1.32	24.39
Medifast	$602.46 million	0.22	$2.09 million	$0.01	1,203.00

Vital Farms has higher revenue and earnings than Medifast. Vital Farms is trading at a lower price-to-earnings ratio than Medifast, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Vital Farms and Medifast, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vital Farms	0	2	13	0	2.87
Medifast	1	1	0	0	1.50

Vital Farms presently has a consensus price target of $50.64, suggesting a potential upside of 57.26%. Medifast has a consensus price target of $16.50, suggesting a potential upside of 37.16%. Given Vital Farms’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Vital Farms is more favorable than Medifast.

Risk and Volatility

Vital Farms has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500. Comparatively, Medifast has a beta of 0.48, meaning that its stock price is 52% less volatile than the S&P 500.

Institutional & Insider Ownership

98.6% of Vital Farms shares are held by institutional investors. Comparatively, 95.5% of Medifast shares are held by institutional investors. 21.3% of Vital Farms shares are held by company insiders. Comparatively, 2.9% of Medifast shares are held 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.

Profitability

This table compares Vital Farms and Medifast’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Vital Farms	8.50%	20.19%	14.69%
Medifast	0.06%	-0.89%	-0.69%

Summary

Vital Farms beats Medifast on 13 of the 14 factors compared between the two stocks.

About Vital Farms

Vital Farms, Inc., a food company, provides pasture-raised products in the United States. It offers shell eggs, butter, hard-boiled eggs, and liquid whole eggs. The company was founded in 2007 and is headquartered in Austin, Texas.

About Medifast

Medifast, Inc., through its subsidiaries, engages in the manufacture and sale of weight loss, weight management, and healthy living products in the United States and the Asia-Pacific. It offers bars, puffs, cereal, crunchers, drinks, hearty choices, oatmeal, pancakes, pudding, soft serve, shakes, smoothies, soft bakes, and soups under the OPTAVIA, OPTAVIA ACTIVE, and Optimal Health brand names. The company markets its products through point-of-sale transactions, as well as through ecommerce platform. Medifast, Inc. was founded in 1980 and is headquartered in Baltimore, Maryland.