Financial Analysis: Lamb Weston (NYSE:LW) & S&W Seed (NASDAQ:SANW)

S&W Seed (NASDAQ:SANW) and Lamb Weston (NYSE:LW) are both consumer staples companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, valuation, risk, analyst recommendations, earnings, dividends and institutional ownership.

Profitability

This table compares S&W Seed and Lamb Weston’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
S&W Seed	-85.38%	-50.81%	-17.71%
Lamb Weston	4.39%	23.33%	5.72%

Volatility & Risk

S&W Seed has a beta of -1.11, suggesting that its share price is 211% less volatile than the S&P 500. Comparatively, Lamb Weston has a beta of 0.46, suggesting that its share price is 54% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for S&W Seed and Lamb Weston, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
S&W Seed	0	0	0	0	0.00
Lamb Weston	0	11	3	0	2.21

Lamb Weston has a consensus price target of $53.36, suggesting a potential upside of 1.55%. Given Lamb Weston’s stronger consensus rating and higher probable upside, analysts clearly believe Lamb Weston is more favorable than S&W Seed.

Valuation and Earnings

This table compares S&W Seed and Lamb Weston”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
S&W Seed	$54.99 million	0.00	-$30.03 million	($7.72)	-0.00
Lamb Weston	$6.61 billion	1.09	$290.00 million	$2.08	25.26

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

Institutional & Insider Ownership

61.7% of S&W Seed shares are held by institutional investors. Comparatively, 89.6% of Lamb Weston shares are held by institutional investors. 11.4% of S&W Seed shares are held by insiders. Comparatively, 1.0% of Lamb Weston shares are held by 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.

Summary

Lamb Weston beats S&W Seed on 13 of the 14 factors compared between the two stocks.

About S&W Seed

S&W Seed Co. engages in the breeding, production, and sale of stevia and alfalfa seeds. The company was founded in 1980 and is headquartered in Longmont, CO.

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.