Analyzing Vital Farms (NASDAQ:VITL) and Tofutti Brands (OTCMKTS:TOFB)

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

Earnings and Valuation

This table compares Tofutti Brands and Vital Farms”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tofutti Brands	$8.82 million	0.46	-$860,000.00	($0.13)	-6.04
Vital Farms	$759.44 million	0.78	$66.28 million	$1.44	9.13

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

Analyst Recommendations

This is a summary of current recommendations and price targets for Tofutti Brands and Vital Farms, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tofutti Brands	0	0	0	0	0.00
Vital Farms	1	3	9	0	2.62

Vital Farms has a consensus price target of $42.82, suggesting a potential upside of 225.86%. Given Vital Farms’ stronger consensus rating and higher probable upside, analysts clearly believe Vital Farms is more favorable than Tofutti Brands.

Institutional and Insider Ownership

5.1% of Tofutti Brands shares are held by institutional investors. Comparatively, 98.6% of Vital Farms shares are held by institutional investors. 9.3% of Tofutti Brands shares are held by insiders. Comparatively, 21.3% of Vital Farms shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Tofutti Brands and Vital Farms’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tofutti Brands	-7.93%	-22.08%	-16.26%
Vital Farms	8.73%	20.69%	14.66%

Risk and Volatility

Tofutti Brands has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500. Comparatively, Vital Farms has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500.

Summary

Vital Farms beats Tofutti Brands on 14 of the 14 factors compared between the two stocks.

About Tofutti Brands

Tofutti Brands Inc. engages in the development, production, and marketing of plant based, dairy free vegan frozen desserts, cheeses, and other food products under the TOFUTTI brand in the United States, Europe, the Middle East, the Asia Pacific, and Africa. The company offers frozen desserts, including frozen sandwiches and chocolate wafers; ice cream sandwiches; dairy free vegan cheese products, such as cream cheese, sour cream, cheese slices, and dairy free ricotta cheese alternatives; spreads; and frozen food products. It sells its products through independent unaffiliated food brokers to distributors, as well as on a direct basis to retail chain accounts or to warehouse accounts that directly service chain accounts. Tofutti Brands, Inc. was founded in 1981 and is based in Cranford, New Jersey.

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.