Head to Head Review: J & J Snack Foods (NASDAQ:JJSF) vs. Lamb Weston (NYSE:LW)

Lamb Weston (NYSE:LW) and J & J Snack Foods (NASDAQ:JJSF) are both consumer staples companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, valuation, earnings and dividends.

Profitability

This table compares Lamb Weston and J & J Snack Foods’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lamb Weston	4.61%	23.77%	5.76%
J & J Snack Foods	3.75%	9.01%	6.18%

Dividends

Lamb Weston pays an annual dividend of $1.52 per share and has a dividend yield of 3.4%. J & J Snack Foods pays an annual dividend of $3.20 per share and has a dividend yield of 4.1%. Lamb Weston pays out 71.0% of its earnings in the form of a dividend. J & J Snack Foods pays out 107.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Lamb Weston has raised its dividend for 7 consecutive years and J & J Snack Foods has raised its dividend for 20 consecutive years. J & J Snack Foods is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Lamb Weston and J & J Snack Foods”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lamb Weston	$6.45 billion	0.97	$357.20 million	$2.14	21.10
J & J Snack Foods	$1.58 billion	0.93	$65.60 million	$2.98	26.32

Lamb Weston has higher revenue and earnings than J & J Snack Foods. Lamb Weston is trading at a lower price-to-earnings ratio than J & J Snack Foods, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Lamb Weston and J & J Snack Foods, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lamb Weston	1	10	3	0	2.14
J & J Snack Foods	2	0	1	0	1.67

Lamb Weston presently has a consensus target price of $47.82, indicating a potential upside of 5.92%. J & J Snack Foods has a consensus target price of $120.00, indicating a potential upside of 53.02%. Given J & J Snack Foods’ higher probable upside, analysts clearly believe J & J Snack Foods is more favorable than Lamb Weston.

Risk and Volatility

Lamb Weston has a beta of 0.47, suggesting that its stock price is 53% less volatile than the S&P 500. Comparatively, J & J Snack Foods has a beta of 0.38, suggesting that its stock price is 62% less volatile than the S&P 500.

Institutional & Insider Ownership

89.6% of Lamb Weston shares are held by institutional investors. Comparatively, 76.0% of J & J Snack Foods shares are held by institutional investors. 0.3% of Lamb Weston shares are held by company insiders. Comparatively, 20.4% of J & J Snack Foods shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Lamb Weston beats J & J Snack Foods on 10 of the 17 factors compared between the two stocks.

About Lamb Weston

Lamb Weston Holdings, Inc. produces, distributes, and markets frozen potato products worldwide. The company operates through four segments: Global, Foodservice, Retail, and Other. It offers frozen potatoes, commercial ingredients, and appetizers under the Lamb Weston brand, as well as under various customer labels. The company also provides its products under its owned or licensed brands, such as Grown in Idaho and Alexia, and other licensed brands, as well as under retailers' own brands. In addition, it engages in the vegetable and dairy businesses. The company sells its products through a network of internal sales personnel and independent brokers, agents, and distributors to chain restaurants, wholesale, grocery, mass merchants, club and specialty retailers, businesses, educational institutions, independent restaurants, regional chain restaurants, and convenience stores. Lamb Weston Holdings, Inc. was incorporated in 1950 and is headquartered in Eagle, Idaho.

About J & J Snack Foods

J&J Snack Foods Corp. engages in the manufacturing of nutritional snack foods and distribution of frozen beverages to the food service and retail supermarket industries. It operates through the following segments: Food Service, Retail Supermarkets, and Frozen Beverages. The Food Service segment includes soft pretzels, frozen novelties, churros, handheld products, and baked goods. The Retail Supermarkets segment offers soft pretzel products including Superpretzel, frozen juice treats and desserts, including Luigi’s real Italian ice, Minute Maid juice bars and soft frozen lemonade, Whole Fruit frozen fruit bars and sorbet, Philly Swirl cups and sticks, ICEE Squeeze-Up Tubes and dough enrobed handheld products including Patio burritos. The Frozen Beverages segment provides frozen beverages to the food service industry primarily under the names ICEE, SLUSH PUPPIE, and PARROT ICE in the United States, Mexico, and Canada, as well as repair and maintenance services. The company was founded by Gerald B. Shreiber in 1971 and is headquartered in Mount Laurel, NJ.