B&G Foods (NYSE:BGS) and TreeHouse Foods (NYSE:THS) Critical Review

TreeHouse Foods (NYSE:THS) and B&G Foods (NYSE:BGS) are both small-cap consumer staples companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Volatility and Risk

TreeHouse Foods has a beta of 0.25, indicating that its stock price is 75% less volatile than the S&P 500. Comparatively, B&G Foods has a beta of 0.43, indicating that its stock price is 57% less volatile than the S&P 500.

Valuation & Earnings

This table compares TreeHouse Foods and B&G Foods”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TreeHouse Foods	$3.34 billion	0.35	$26.90 million	($4.80)	-4.85
B&G Foods	$1.84 billion	0.19	-$251.25 million	($3.16)	-1.38

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for TreeHouse Foods and B&G Foods, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TreeHouse Foods	2	7	0	0	1.78
B&G Foods	1	4	0	0	1.80

TreeHouse Foods presently has a consensus target price of $24.67, suggesting a potential upside of 5.98%. B&G Foods has a consensus target price of $4.67, suggesting a potential upside of 6.91%. Given B&G Foods’ stronger consensus rating and higher possible upside, analysts clearly believe B&G Foods is more favorable than TreeHouse Foods.

Insider and Institutional Ownership

99.8% of TreeHouse Foods shares are owned by institutional investors. Comparatively, 66.2% of B&G Foods shares are owned by institutional investors. 11.1% of TreeHouse Foods shares are owned by company insiders. Comparatively, 3.2% of B&G Foods shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares TreeHouse Foods and B&G Foods’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TreeHouse Foods	-7.25%	5.52%	2.06%
B&G Foods	-12.02%	7.16%	1.34%

Summary

TreeHouse Foods beats B&G Foods on 7 of the 13 factors compared between the two stocks.

About TreeHouse Foods

TreeHouse Foods, Inc. manufactures and distributes private brands snacks and beverages in the United States and internationally. The company provides snacking products, such as crackers, pretzels, in-store bakery items, frozen griddle items, cookies, and candies; and beverage and drink mixes, including non-dairy creamer, coffee, broths/stocks, powdered beverages and other blends, tea, and ready-to-drink-beverages. It also offers groceries comprising pickles, refrigerated dough, hot cereal, and cheese and puddings, as well as natural, organic, and gluten-free products. The company sells its products through various distribution channels, including retailers, foodservice distributors, food-away-from-home customers, refrigerated and frozen formats, and co-manufacturers, as well as industrial and export, which includes food manufacturers and repackagers of foodservice products. TreeHouse Foods, Inc. was founded in 1862 and is based in Oak Brook, Illinois.

About B&G Foods

B&G Foods, Inc. is a holding company, which engages in the manufacture, sale, and distribution of shelf-stable frozen food, and household products in the U.S., Canada, and Puerto Rico. It operates through the following segments: Specialty, Meals, Frozen & Vegetables, and Spices & Flavor Solutions. The Specialty segment includes, among others, the Crisco, Clabber Girl, Bear Creek, Polaner, Underwood, B&G, Grandma’s, New York Style, Don Pepino, Sclafani, B&M, Baker’s Joy, Regina, TrueNorth, Static Guard, SugarTwin and Brer Rabbit brands. The Meals segment focuses on the Ortega, Maple Grove Farms, Cream of Wheat, Las Palmas, Victoria, Mama Mary’s, Spring Tree, McCann’s, Carey’s and Vermont Maid brands. The Frozen & Vegetables segment consists of Green Giant and Le Sueur brands. The Spices & Flavor Solutions segment offers Dash, Spice Islands, Weber, Ac’cent, Tone’s, Trappey’s, Durkee and Wright’s brands. Its products include frozen and canned vegetables, hot cereals, fruit spreads, canned meats and beans, bagel chips, spices, seasonings, hot sauces, and wine vinegar. Its brands include Back to Nature, Bear Creek, Cream of Wheat, Green Giant, Mrs. Dash, and Ortega. The company was founded in 1889 and is headquartered in Parsippany, NJ.