Critical Review: Nomad Foods (NYSE:NOMD) & Cal-Maine Foods (NASDAQ:CALM)

Cal-Maine Foods (NASDAQ:CALM) and Nomad Foods (NYSE:NOMD) are both consumer staples companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, dividends, valuation, profitability, institutional ownership, earnings and analyst recommendations.

Institutional and Insider Ownership

84.7% of Cal-Maine Foods shares are owned by institutional investors. Comparatively, 75.3% of Nomad Foods shares are owned by institutional investors. 3.6% of Cal-Maine 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 Cal-Maine Foods and Nomad Foods’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cal-Maine Foods	10.88%	11.79%	10.06%
Nomad Foods	4.20%	8.88%	3.53%

Dividends

Cal-Maine Foods pays an annual dividend of $1.43 per share and has a dividend yield of 1.9%. Nomad Foods pays an annual dividend of $0.68 per share and has a dividend yield of 6.3%. Cal-Maine Foods pays out 21.8% of its earnings in the form of a dividend. Nomad Foods pays out 66.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Cal-Maine Foods has raised its dividend for 1 consecutive years and Nomad Foods has raised its dividend for 2 consecutive years. Nomad Foods is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings and target prices for Cal-Maine Foods and Nomad Foods, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cal-Maine Foods	0	5	0	0	2.00
Nomad Foods	1	2	3	0	2.33

Cal-Maine Foods currently has a consensus price target of $94.71, suggesting a potential upside of 27.32%. Nomad Foods has a consensus price target of $13.25, suggesting a potential upside of 21.97%. Given Cal-Maine Foods’ higher possible upside, equities analysts clearly believe Cal-Maine Foods is more favorable than Nomad Foods.

Risk and Volatility

Cal-Maine Foods has a beta of 0.23, indicating that its stock price is 77% less volatile than the S&P 500. Comparatively, Nomad Foods has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500.

Valuation and Earnings

This table compares Cal-Maine Foods and Nomad Foods”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cal-Maine Foods	$2.91 billion	1.20	$316.68 million	$6.55	11.36
Nomad Foods	$3.43 billion	0.44	$154.66 million	$1.02	10.65

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

Summary

Cal-Maine Foods beats Nomad Foods on 11 of the 17 factors compared between the two stocks.

About Cal-Maine Foods

Cal-Maine Foods, Inc., together with its subsidiaries, produces, grades, packages, markets, and distributes shell eggs. The company offers specialty shell eggs, such as nutritionally enhanced, cage free, organic, free-range, pasture-raised, and brown eggs under the Egg-Land's Best, Land O' Lakes, Farmhouse Eggs, Sunups, Sunny Meadow, and 4Grain brand names. It sells its products to various customers, including national and regional grocery store chains, club stores, independent supermarkets, foodservice distributors, and egg product consumers primarily in the southwestern, southeastern, mid-western, and mid-Atlantic regions of the United States. Cal-Maine Foods, Inc. was founded in 1957 and is headquartered in Ridgeland, Mississippi.

About Nomad Foods

Nomad Foods Limited, together with its subsidiaries, manufactures, markets, and distributes a range of frozen food products in the United Kingdom and internationally. The company offers frozen fish products, including fish fingers, coated fish, and natural fish; ready-to-cook vegetable products, such as peas and spinach; and frozen poultry and meat products comprising nuggets, grills, and burgers. It also provides meal products that include ready-to-cook noodles, pasta, lasagna, pancakes, and other ready-made meals; ice creams, such as in-home and out-of-home ice creams; and other products consisting of soups, pizzas, bakery goods, and meat substitutes. The company sells its products to supermarkets and food retail chains primarily under the Birds Eye, Green Cuisine, iglo, Findus, Aunt Bessie's, Goodfella's, Frikom, Ledo, La Cocinera, and Belviva brand names. Nomad Foods Limited was founded in 2014 and is headquartered in Feltham, the United Kingdom.