Financial Analysis: Freshpet (NASDAQ:FRPT) vs. Mission Produce (NASDAQ:AVO)

Mission Produce (NASDAQ:AVO) and Freshpet (NASDAQ:FRPT) are both consumer staples companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, risk, profitability, dividends, earnings, valuation and institutional ownership.

Profitability

This table compares Mission Produce and Freshpet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mission Produce	0.12%	5.91%	3.41%
Freshpet	10.90%	6.39%	4.36%

Analyst Ratings

This is a summary of recent ratings and target prices for Mission Produce and Freshpet, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mission Produce	1	0	4	1	2.83
Freshpet	0	7	9	0	2.56

Mission Produce presently has a consensus target price of $16.00, indicating a potential upside of 35.08%. Freshpet has a consensus target price of $80.31, indicating a potential upside of 20.41%. Given Mission Produce’s stronger consensus rating and higher possible upside, equities analysts plainly believe Mission Produce is more favorable than Freshpet.

Valuation and Earnings

This table compares Mission Produce and Freshpet”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mission Produce	$1.39 billion	0.75	$37.70 million	$0.03	394.83
Freshpet	$1.10 billion	2.93	$139.14 million	$2.52	26.47

Freshpet has lower revenue, but higher earnings than Mission Produce. Freshpet is trading at a lower price-to-earnings ratio than Mission Produce, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

63.6% of Mission Produce shares are held by institutional investors. 30.8% of Mission Produce shares are held by insiders. Comparatively, 4.3% of Freshpet shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

Mission Produce has a beta of 0.45, indicating that its share price is 55% less volatile than the S&P 500. Comparatively, Freshpet has a beta of 1.75, indicating that its share price is 75% more volatile than the S&P 500.

Summary

Freshpet beats Mission Produce on 8 of the 15 factors compared between the two stocks.

About Mission Produce

Mission Produce is a global producer, packer and distributor of fresh avocados and other fruit. The company sources produce from growing regions around the world and provides services that include packing, ripening, quality control and distribution. Founded in 1983 by Steve Barnard, Mission Produce has built a global supply chain serving customers in North America, Europe and Asia. Its sourcing network includes countries such as Mexico, Peru, Chile and Colombia, helping supply fruit across different growing seasons.

About Freshpet

Freshpet, Inc. makes and markets fresh, refrigerated food and treats for dogs and cats. Founded in 2006, the company focuses on recipes made with fresh ingredients and positioned as an alternative to shelf-stable pet food. Its products are sold under brands including Freshpet, Freshpet Select, Vital and Nature’s Fresh. Freshpet distributes them through refrigerated displays in grocery, mass-market, club and pet specialty stores, as well as through online retailers. The company primarily serves customers in the United States and Canada and also sells its products in select international markets.