J & J Snack Foods (NASDAQ:JJSF) & Lifeway Foods (NASDAQ:LWAY) Critical Analysis

J & J Snack Foods (NASDAQ:JJSF) and Lifeway Foods (NASDAQ:LWAY) are both small-cap consumer staples companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.

Valuation & Earnings

This table compares J & J Snack Foods and Lifeway Foods”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
J & J Snack Foods	$1.58 billion	1.01	$65.60 million	$2.60	32.76
Lifeway Foods	$212.50 million	1.63	$13.86 million	$0.70	32.67

J & J Snack Foods has higher revenue and earnings than Lifeway Foods. Lifeway Foods 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.

Insider and Institutional Ownership

76.0% of J & J Snack Foods shares are owned by institutional investors. Comparatively, 36.4% of Lifeway Foods shares are owned by institutional investors. 20.4% of J & J Snack Foods shares are owned by company insiders. Comparatively, 18.6% of Lifeway Foods shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for J & J Snack Foods and Lifeway Foods, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
J & J Snack Foods	1	1	2	0	2.25
Lifeway Foods	0	1	2	1	3.00

J & J Snack Foods currently has a consensus target price of $110.50, suggesting a potential upside of 29.75%. Lifeway Foods has a consensus target price of $34.00, suggesting a potential upside of 48.69%. Given Lifeway Foods’ stronger consensus rating and higher probable upside, analysts clearly believe Lifeway Foods is more favorable than J & J Snack Foods.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
J & J Snack Foods	3.23%	8.93%	6.07%
Lifeway Foods	4.48%	12.66%	9.29%

Volatility and Risk

J & J Snack Foods has a beta of 0.4, indicating that its stock price is 60% less volatile than the S&P 500. Comparatively, Lifeway Foods has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500.

Summary

Lifeway Foods beats J & J Snack Foods on 8 of the 14 factors compared between the two stocks.

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.

About Lifeway Foods

Lifeway Foods, Inc. produces and markets probiotic-based products in the United States and internationally. Its primary product is drinkable kefir, a cultured dairy product in various organic and non-organic sizes, flavors, and types. The company offers European-style soft cheeses; cream and other products; ProBugs, a line of kefir products designed for children; drinkable yogurt; and fresh made butter and sour cream. It sells its products under the Lifeway, GlenOaks Farms, and Fresh Made brand names, as well as under private labels on behalf of customers primarily through direct sales force, brokers, and distributors. Lifeway Foods, Inc. was incorporated in 1986 and is based in Morton Grove, Illinois.