Lamb Weston (LW) vs. TreeHouse Foods (THS) Head-To-Head Review

Lamb Weston (NYSE: LW) and TreeHouse Foods (NYSE:THS) are both mid-cap consumer staples companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, valuation, dividends, profitability and analyst recommendations.

Risk and Volatility

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Lamb Weston has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500. Comparatively, TreeHouse Foods has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500.

Earnings and Valuation

This table compares Lamb Weston and TreeHouse Foods’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Lamb Weston $3.17 billion 2.95 $324.80 million $2.32 27.56
TreeHouse Foods $6.31 billion 0.35 -$286.20 million $2.81 13.99

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

Dividends

Lamb Weston pays an annual dividend of $0.76 per share and has a dividend yield of 1.2%. TreeHouse Foods does not pay a dividend. Lamb Weston pays out 32.8% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Lamb Weston and TreeHouse Foods, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lamb Weston 0 2 3 1 2.83
TreeHouse Foods 1 13 4 0 2.17

Lamb Weston presently has a consensus target price of $59.17, indicating a potential downside of 7.48%. TreeHouse Foods has a consensus target price of $53.55, indicating a potential upside of 36.21%. Given TreeHouse Foods’ higher possible upside, analysts plainly believe TreeHouse Foods is more favorable than Lamb Weston.

Profitability

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

Net Margins Return on Equity Return on Assets
Lamb Weston 11.75% -69.53% 14.24%
TreeHouse Foods -4.54% 6.49% 2.54%

Institutional and Insider Ownership

80.7% of Lamb Weston shares are owned by institutional investors. 0.3% of Lamb Weston shares are owned by company insiders. Comparatively, 3.6% of TreeHouse Foods shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Lamb Weston beats TreeHouse Foods on 10 of the 17 factors compared between the two stocks.

About Lamb Weston

Lamb Weston Holdings, Inc. produces and markets value-added frozen potato products worldwide. It operates through four segments: Global, Foodservice, Retail, and Other. The company offers frozen potatoes, sweet potatoes, and appetizers under the Lamb Weston brand name, as well as various customer labels. It serves retail and foodservice customers; grocery, mass, club, and specialty retailers; and businesses, independent restaurants, regional chain restaurants, and convenience stores, as well as educational institutions. The company was founded in 1950 and is headquartered in Eagle, Idaho.

About TreeHouse Foods

TreeHouse Foods, Inc. operates as a food and beverage manufacturer in the United States, Canada, and Italy. The company operates through Baked Goods, Beverages, Condiments, Meals, and Snacks segments. The Baked Goods segment offers candies, cookies, crackers, in-store bakery products, pita chips, pretzels, refrigerated dough, retail griddle waffles, pancakes, and French toasts. The Beverages segment offers broths, liquid non-dairy creamers, non-dairy powdered creamers, powdered drinks, single serve hot beverages, specialty teas, and sweeteners. The Condiments segment offers cheese and pudding products; jams, preserves, and jellies; mayonnaise; Mexican, barbeque, and other sauces; pickles and related products; refrigerated and shelf stable dressings and sauces; and table and flavored syrups. The Meals segment offers baking and mix powders; powdered soups and gravies; macaroni and cheese; pasta; ready-to-eat and hot cereals; skillet dinners; and condensed and ready to serve soup and infant feeding products. The Snacks segment offers bars, dried fruits, snack nuts, trail mixes, and other wholesome snacks. The company sells its products through various distribution channels comprising grocery retailers and foodservice distributors, as well as food manufacturers and repackagers of foodservice products. TreeHouse Foods, Inc. was founded in 1862 and is based in Oak Brook, Illinois.

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