Kraft Heinz (NASDAQ:KHC – Get Free Report) and BAB (OTCMKTS:BABB – Get Free Report) are both consumer staples companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, risk, valuation, institutional ownership, profitability and dividends.
Institutional and Insider Ownership
78.2% of Kraft Heinz shares are owned by institutional investors. 0.4% of Kraft Heinz shares are owned by insiders. Comparatively, 33.7% of BAB shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Profitability
This table compares Kraft Heinz and BAB’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Kraft Heinz | -23.44% | 7.07% | 3.68% |
| BAB | 16.25% | 16.81% | 11.65% |
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Kraft Heinz | 4 | 16 | 0 | 1 | 1.90 |
| BAB | 0 | 0 | 0 | 0 | 0.00 |
Kraft Heinz presently has a consensus price target of $25.21, indicating a potential upside of 1.66%. Given Kraft Heinz’s stronger consensus rating and higher probable upside, research analysts clearly believe Kraft Heinz is more favorable than BAB.
Risk & Volatility
Kraft Heinz has a beta of 0.08, indicating that its share price is 92% less volatile than the S&P 500. Comparatively, BAB has a beta of 0.22, indicating that its share price is 78% less volatile than the S&P 500.
Dividends
Kraft Heinz pays an annual dividend of $1.60 per share and has a dividend yield of 6.5%. BAB pays an annual dividend of $0.04 per share and has a dividend yield of 4.0%. Kraft Heinz pays out -32.4% of its earnings in the form of a dividend. BAB pays out 50.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Kraft Heinz is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation & Earnings
This table compares Kraft Heinz and BAB”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Kraft Heinz | $24.94 billion | 1.18 | -$5.85 billion | ($4.94) | -5.02 |
| BAB | $3.44 million | 2.10 | $560,000.00 | $0.08 | 12.44 |
BAB has lower revenue, but higher earnings than Kraft Heinz. Kraft Heinz is trading at a lower price-to-earnings ratio than BAB, indicating that it is currently the more affordable of the two stocks.
Summary
BAB beats Kraft Heinz on 9 of the 16 factors compared between the two stocks.
About Kraft Heinz
The Kraft Heinz Company, together with its subsidiaries, manufactures and markets food and beverage products in North America and internationally. Its products include condiments and sauces, cheese and dairy products, meals, meats, refreshment beverages, coffee, and other grocery products under the Kraft, Oscar Mayer, Heinz, Philadelphia, Lunchables, Velveeta, Ore-Ida, Maxwell House, Kool-Aid, Jell-O, Heinz, ABC, Master, Quero, Kraft, Golden Circle, Wattie's, Pudliszki, and Plasmon brands. It sells its products through its own sales organizations, as well as through independent brokers, agents, and distributors to chain, wholesale, cooperative, and independent grocery accounts; convenience, value, and club stores; pharmacies and drug stores; mass merchants; foodservice distributors; institutions, including hotels, restaurants, bakeries, hospitals, health care facilities, and government agencies; and online through various e-commerce platforms and retailers. The company was formerly known as H.J. Heinz Holding Corporation and changed its name to The Kraft Heinz Company in July 2015. The Kraft Heinz Company was founded in 1869 and is based in Pittsburgh, Pennsylvania.
About BAB
BAB, Inc. franchises and licenses bagel and muffin retail units under the Big Apple Bagels (BAB), My Favorite Muffin (MFM), and SweetDuet (SD) trade names in the United States. It's BAB franchised brand includes daily baked bagels, flavored cream cheeses, premium coffees, gourmet bagel sandwiches, and other related products; and MFM brand comprises various freshly baked muffins and coffees, as well as units operating as My Favorite Muffin Your All Day Bakery Café features specialty bagel sandwiches and related products. The company's SD brand includes frozen yogurt products. BAB, Inc. was founded in 1993 and is based in Deerfield, Illinois.
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