Smithfield Foods (NASDAQ:SFD) & Lifeway Foods (NASDAQ:LWAY) Head-To-Head Survey

Lifeway Foods (NASDAQ:LWAY) and Smithfield Foods (NASDAQ:SFD) are both consumer staples companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, risk, valuation, earnings, analyst recommendations, profitability and dividends.

Dividends

Lifeway Foods pays an annual dividend of $0.08 per share and has a dividend yield of 0.3%. Smithfield Foods pays an annual dividend of $1.25 per share and has a dividend yield of 6.8%. Lifeway Foods pays out 11.4% of its earnings in the form of a dividend. Smithfield Foods pays out 46.6% 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.

Valuation and Earnings

This table compares Lifeway Foods and Smithfield Foods”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lifeway Foods	$242.41 million	1.45	$10.57 million	$0.70	33.17
Smithfield Foods	$15.47 billion	0.47	$1.06 billion	$2.68	6.84

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

Volatility & Risk

Lifeway Foods has a beta of 0.47, meaning that its stock price is 53% less volatile than the S&P 500. Comparatively, Smithfield Foods has a beta of -0.41, meaning that its stock price is 141% less volatile than the S&P 500.

Institutional and Insider Ownership

36.4% of Lifeway Foods shares are owned by institutional investors. 18.6% of Lifeway Foods shares are owned by insiders. Comparatively, 1.8% of Smithfield Foods shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and target prices for Lifeway Foods and Smithfield Foods, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lifeway Foods	0	1	2	1	3.00
Smithfield Foods	1	3	3	0	2.29

Lifeway Foods currently has a consensus price target of $34.00, indicating a potential upside of 46.43%. Smithfield Foods has a consensus price target of $26.00, indicating a potential upside of 41.84%. Given Lifeway Foods’ stronger consensus rating and higher probable upside, equities analysts clearly believe Lifeway Foods is more favorable than Smithfield Foods.

Profitability

This table compares Lifeway Foods and Smithfield Foods’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lifeway Foods	N/A	N/A	N/A
Smithfield Foods	N/A	N/A	N/A

Summary

Lifeway Foods beats Smithfield Foods on 9 of the 14 factors compared between the two stocks.

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.

About Smithfield Foods

Smithfield Foods, Inc. produces and markets a variety of fresh meat and packaged meats products both domestically and internationally. The Company operates in four segments: Pork, Hog Production, International and Corporate, each of which consists of a number of subsidiaries, joint ventures and other investments. The Pork segment consists mainly of its three wholly owned United States fresh pork and packaged meats subsidiaries: The Smithfield Packing Company, Inc. (Smithfield Packing), Farmland Foods, Inc. (Farmland Foods) and John Morrell Food Group (John Morrell). The Hog Production segment consists of the Company’s hog production operations located in the United States. On September 2012 (fiscal 2013), the Company acquired a 70% controlling interest in American Skin Food Group, LLC. Effective September 26, 2013, Shuanghui International Holdings Ltd merged with Smithfield Foods Inc, a producer and wholesaler of pork meat products.