Analyzing BAB (OTCMKTS:BABB) & Campbell’s (NASDAQ:CPB)

Campbell’s (NASDAQ:CPB) and BAB (OTCMKTS:BABB) are both consumer staples companies, but which is the better business? We will compare the two companies based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.

Valuation & Earnings

This table compares Campbell’s and BAB”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Campbell’s	$10.25 billion	0.67	$602.00 million	$2.02	11.41
BAB	$3.44 million	1.77	$560,000.00	$0.09	9.33

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

Institutional & Insider Ownership

52.3% of Campbell’s shares are owned by institutional investors. 19.8% of Campbell’s shares are owned by insiders. Comparatively, 20.3% of BAB shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for Campbell’s and BAB, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Campbell’s	8	11	0	0	1.58
BAB	0	0	0	0	0.00

Campbell’s presently has a consensus price target of $21.20, suggesting a potential downside of 8.03%. Given Campbell’s’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Campbell’s is more favorable than BAB.

Dividends

Campbell’s pays an annual dividend of $1.56 per share and has a dividend yield of 6.8%. BAB pays an annual dividend of $0.04 per share and has a dividend yield of 4.8%. Campbell’s pays out 77.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BAB pays out 44.4% of its earnings in the form of a dividend.

Risk and Volatility

Campbell’s has a beta of 0.02, indicating that its stock price is 98% less volatile than the S&P 500. Comparatively, BAB has a beta of 0.18, indicating that its stock price is 82% less volatile than the S&P 500.

Profitability

This table compares Campbell’s and BAB’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Campbell’s	6.12%	18.04%	4.74%
BAB	17.49%	17.16%	12.27%

Summary

Campbell’s beats BAB on 9 of the 15 factors compared between the two stocks.

About Campbell’s

The Campbell’s Company, formerly known as Campbell Soup Company, together with its subsidiaries, manufactures and markets food and beverage products in the United States and internationally. The company operates through Meals & Beverages and Snacks segments. The Meals & Beverages segment engages in the retail and foodservice businesses in the United States and Canada. This segment provides Campbell’s condensed and ready-to-serve soups; Swanson broth and stocks; Pacific Foods broth, soups, and non-dairy beverages; Prego pasta sauces; Pace Mexican sauces; Campbell’s gravies, pasta, beans, and dinner sauces; Swanson canned poultry; V8 juices and beverages; Campbell’s tomato juice; and snacking products in foodservice in Canada. The Snacks segment retails Pepperidge Farm cookies, crackers, fresh bakery, and frozen products, which include Goldfish crackers, Snyder’s of Hanover pretzels, Lance sandwich crackers, Cape Cod and Kettle Brand potato chips, Late July snacks, Snack Factory pretzel crisps, Pop Secret popcorn, and other snacking products. This segment is also involved in the retail business in Latin America. It sells its products through retail food chains, mass discounters and merchandisers, club stores, convenience stores, drug stores, and dollar stores, as well as e-commerce and other retail, commercial, and non-commercial establishments, and independent contractor distributors. The company was founded in 1869 and is headquartered in Camden, New Jersey.

About BAB

BAB, Inc. franchises and licenses bagel and muffin retail units under the Big Apple Bagels (BAB), My Favorite Muffin (MFM), and SweetDuet (SD) trade names in the United States. It's BAB franchised brand includes daily baked bagels, flavored cream cheeses, premium coffees, gourmet bagel sandwiches, and other related products; and MFM brand comprises various freshly baked muffins and coffees, as well as units operating as My Favorite Muffin Your All Day Bakery Café features specialty bagel sandwiches and related products. The company's SD brand includes frozen yogurt products. BAB, Inc. was founded in 1993 and is based in Deerfield, Illinois.