Analyzing Sysco (NYSE:SYY) and Freshpet (NASDAQ:FRPT)

Sysco (NYSE:SYY) and Freshpet (NASDAQ:FRPT) are both consumer staples companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, dividends, earnings, institutional ownership and profitability.

Analyst Ratings

This is a breakdown of recent recommendations for Sysco and Freshpet, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sysco	0	7	9	0	2.56
Freshpet	1	6	11	0	2.56

Sysco presently has a consensus target price of $88.15, indicating a potential upside of 15.54%. Freshpet has a consensus target price of $74.88, indicating a potential upside of 45.16%. Given Freshpet’s higher possible upside, analysts plainly believe Freshpet is more favorable than Sysco.

Profitability

This table compares Sysco and Freshpet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sysco	2.08%	103.57%	8.06%
Freshpet	17.63%	6.22%	4.19%

Volatility & Risk

Sysco has a beta of 0.66, suggesting that its stock price is 34% less volatile than the S&P 500. Comparatively, Freshpet has a beta of 1.73, suggesting that its stock price is 73% more volatile than the S&P 500.

Valuation & Earnings

This table compares Sysco and Freshpet”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sysco	$83.57 billion	0.44	$1.83 billion	$3.61	21.14
Freshpet	$1.10 billion	2.30	$139.14 million	$3.74	13.79

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

Institutional & Insider Ownership

83.4% of Sysco shares are owned by institutional investors. 0.6% of Sysco shares are owned by company insiders. Comparatively, 4.4% of Freshpet shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

About Sysco

Sysco Corporation, through its subsidiaries, engages in the marketing and distribution of various food and related products to the foodservice or food-away-from-home industry in the United States, Canada, the United Kingdom, France, and internationally. It operates through U.S. Foodservice Operations, International Foodservice Operations, SYGMA, and Other segments. The company distributes frozen food, such as meat, seafood, fully prepared entrées, fruits, vegetables, and desserts; canned and dry food products; fresh meat and seafood products; dairy products; beverages; imported specialties; and fresh produce products. It also supplies various non-food items, including paper products comprising disposable napkins, plates, and cups; tableware consisting of glassware and silverware; cookware, such as pots, pans, and utensils; restaurant and kitchen equipment and supplies; and cleaning supplies. The company serves restaurants, hospitals and nursing facilities, schools and colleges, hotels and motels, industrial caterers, and other foodservice venues. Sysco Corporation was incorporated in 1969 and is headquartered in Houston, Texas.

About Freshpet

Freshpet, Inc., together with its subsidiaries, manufactures, distributes, and markets natural fresh meals and treats for dogs and cats in the United States, Canada, and Europe. It sells dog food, cat food, and dog treats under the Freshpet brand name; and Dognation and Dog Joy labels through various classes of retail, including grocery, mass, club, pet specialty, and natural, as well as online. The company was incorporated in 2004 and is headquartered in Secaucus, New Jersey.