Critical Analysis: Amcon Distributing (NASDAQ:DIT) and Chefs’ Warehouse (NASDAQ:CHEF)

Amcon Distributing (NASDAQ:DIT) and Chefs’ Warehouse (NASDAQ:CHEF) are both retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, profitability and institutional ownership.

Profitability

This table compares Amcon Distributing and Chefs’ Warehouse’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Amcon Distributing	0.13%	3.27%	0.95%
Chefs’ Warehouse	1.28%	12.67%	3.41%

Valuation & Earnings

This table compares Amcon Distributing and Chefs’ Warehouse”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Amcon Distributing	$2.78 billion	0.03	$4.34 million	$5.96	20.81
Chefs’ Warehouse	$3.43 billion	0.63	$34.59 million	$1.14	47.83

Chefs’ Warehouse has higher revenue and earnings than Amcon Distributing. Amcon Distributing is trading at a lower price-to-earnings ratio than Chefs’ Warehouse, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

11.1% of Amcon Distributing shares are owned by institutional investors. Comparatively, 91.6% of Chefs’ Warehouse shares are owned by institutional investors. 73.0% of Amcon Distributing shares are owned by company insiders. Comparatively, 11.9% of Chefs’ Warehouse shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings for Amcon Distributing and Chefs’ Warehouse, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Amcon Distributing	0	0	0	0	0.00
Chefs’ Warehouse	0	0	5	0	3.00

Chefs’ Warehouse has a consensus price target of $53.80, indicating a potential downside of 1.34%. Given Chefs’ Warehouse’s stronger consensus rating and higher possible upside, analysts clearly believe Chefs’ Warehouse is more favorable than Amcon Distributing.

Risk and Volatility

Amcon Distributing has a beta of 0.58, meaning that its stock price is 42% less volatile than the S&P 500. Comparatively, Chefs’ Warehouse has a beta of 2.29, meaning that its stock price is 129% more volatile than the S&P 500.

Summary

Chefs’ Warehouse beats Amcon Distributing on 12 of the 14 factors compared between the two stocks.

About Amcon Distributing

AMCON Distributing Co. engages in the distribution of consumer products. It operates through the Wholesale Distribution (Wholesale) and Retail Health Food (Retail) segments. The Wholesale segment refers to the wholesale distribution of consumer products. The Retail segment focuses on the sale of health and natural food products. The company was founded in 1986 and is headquartered in Omaha, NE.

About Chefs’ Warehouse

The Chefs’ Warehouse, Inc., together with its subsidiaries, distributes specialty food and center-of-the-plate products in the United States, the Middle East, and Canada. The company’s product portfolio includes specialty food products, such as artisan charcuterie, specialty cheeses, unique oils and vinegars, truffles, caviar, chocolate, and pastry products; and center-of-the-plate products consisting of custom cut beef, seafood, and hormone-free poultry, as well as broadline food products comprising cooking oils, butter, eggs, milk, and flour. The company serves menu-driven independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolatiers, cruise lines, casinos, and specialty food stores. It markets its center-of-the-plate products directly to consumers through a mail and e-commerce platform. The Chefs’ Warehouse, Inc. was founded in 1985 and is headquartered in Ridgefield, Connecticut.