Analyzing Sprouts Farmers Market (NASDAQ:SFM) & Andersons (NASDAQ:ANDE)

Andersons (NASDAQ:ANDE) and Sprouts Farmers Market (NASDAQ:SFM) are both mid-cap consumer staples companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, risk, earnings, valuation, institutional ownership and dividends.

Analyst Recommendations

This is a summary of current recommendations and price targets for Andersons and Sprouts Farmers Market, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Andersons	0	1	3	1	3.00
Sprouts Farmers Market	1	6	7	0	2.43

Andersons currently has a consensus price target of $95.00, indicating a potential upside of 33.00%. Sprouts Farmers Market has a consensus price target of $92.25, indicating a potential upside of 29.82%. Given Andersons’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Andersons is more favorable than Sprouts Farmers Market.

Profitability

This table compares Andersons and Sprouts Farmers Market’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Andersons	1.62%	16.23%	5.84%
Sprouts Farmers Market	5.58%	34.84%	11.99%

Insider and Institutional Ownership

87.1% of Andersons shares are owned by institutional investors. 4.3% of Andersons shares are owned by insiders. Comparatively, 1.3% of Sprouts Farmers Market shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

Andersons has a beta of 0.63, suggesting that its share price is 37% less volatile than the S&P 500. Comparatively, Sprouts Farmers Market has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500.

Valuation and Earnings

This table compares Andersons and Sprouts Farmers Market”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Andersons	$11.01 billion	0.22	$95.71 million	$5.18	13.79
Sprouts Farmers Market	$8.81 billion	0.75	$523.67 million	$5.22	13.61

Sprouts Farmers Market has lower revenue, but higher earnings than Andersons. Sprouts Farmers Market is trading at a lower price-to-earnings ratio than Andersons, indicating that it is currently the more affordable of the two stocks.

Summary

Sprouts Farmers Market beats Andersons on 8 of the 15 factors compared between the two stocks.

About Andersons

The Andersons, Inc. operates in trade, renewables, and nutrient and industrial sectors in the United States, Canada, Mexico, Egypt, Switzerland, and internationally. It operates through three segments: Trade, Renewables, and Nutrient & Industrial. The company’s Trade segment operates grain elevators; stores commodities; and provides grain marketing, risk management, and origination services, as well as sells commodities, such as corn, soybeans, wheat, oats, ethanol, and corn oil. This segment also engages in the commodity merchandising business, as well as offers logistics for physical commodities, such as whole grains, grain products, feed ingredients, domestic fuel products, and other agricultural commodities. Its Renewables segment produces, purchases, and sells ethanol, and co-products, as well as offers facility operations, risk management, and marketing services to the ethanol plants it invests in and operates. The company’s Nutrient & Industrial segment manufactures, distributes, and retails agricultural and related plant nutrients, liquid industrial products, corncob-based products, and pelleted lime and gypsum products, as well as turf fertilizer, pesticide, and herbicide products; and crop nutrients, crop protection chemicals, and seed products, as well as provides application and agronomic services to commercial and family farmers. In addition, this segment produces corncob-based products for laboratory animal bedding and private-label cat litter, as well as absorbents, blast cleaners, carriers, and polishers; professional lawn care products for golf course and turf care markets; fertilizer and weed, and pest control products; dry and liquid agricultural nutrients, pelleted lime, gypsum, and soil amendments; and micronutrients, as well as industrial products comprising nitrogen reagents, calcium nitrate, deicers, and dust abatement products. The Andersons, Inc. was founded in 1947 and is based in Maumee, Ohio.

About Sprouts Farmers Market

Sprouts Farmers Market, Inc., together with its subsidiaries, engages in the retailing of fresh, natural, and organic food products under the Sprouts brand in the United States. It offers perishable product categories, including fresh produce, meat and meat alternatives, seafood, deli, bakery, floral, and dairy and dairy alternatives; and non-perishable product categories, such as grocery, vitamins and supplements, bulk items, frozen foods, beer and wine, and natural health and body care. Sprouts Farmers Market, Inc. was founded in 1943 and is headquartered in Phoenix, Arizona.