Financial Contrast: Medifast (NYSE:MED) and Nomad Foods (NYSE:NOMD)

Medifast (NYSE:MED) and Nomad Foods (NYSE:NOMD) are both consumer staples companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, dividends and profitability.

Analyst Ratings

This is a summary of current ratings and recommmendations for Medifast and Nomad Foods, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Medifast	1	1	0	0	1.50
Nomad Foods	1	1	4	0	2.50

Medifast presently has a consensus price target of $16.50, indicating a potential upside of 18.10%. Nomad Foods has a consensus price target of $19.75, indicating a potential upside of 50.82%. Given Nomad Foods’ stronger consensus rating and higher possible upside, analysts clearly believe Nomad Foods is more favorable than Medifast.

Risk and Volatility

Medifast has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500. Comparatively, Nomad Foods has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500.

Insider and Institutional Ownership

95.5% of Medifast shares are owned by institutional investors. Comparatively, 75.3% of Nomad Foods shares are owned by institutional investors. 2.9% of Medifast shares are owned by insiders. Comparatively, 17.3% of Nomad Foods shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Medifast	$602.46 million	0.25	$2.09 million	$0.32	43.66
Nomad Foods	$3.35 billion	0.60	$245.74 million	$1.46	8.97

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

Profitability

This table compares Medifast and Nomad Foods’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Medifast	0.76%	2.00%	1.50%
Nomad Foods	6.93%	10.26%	4.20%

Summary

Nomad Foods beats Medifast on 11 of the 14 factors compared between the two stocks.

About Medifast

Medifast, Inc., through its subsidiaries, engages in the manufacture and sale of weight loss, weight management, and healthy living products in the United States and the Asia-Pacific. It offers bars, puffs, cereal, crunchers, drinks, hearty choices, oatmeal, pancakes, pudding, soft serve, shakes, smoothies, soft bakes, and soups under the OPTAVIA, OPTAVIA ACTIVE, and Optimal Health brand names. The company markets its products through point-of-sale transactions, as well as through ecommerce platform. Medifast, Inc. was founded in 1980 and is headquartered in Baltimore, Maryland.

About Nomad Foods

Nomad Foods Limited, together with its subsidiaries, manufactures, markets, and distributes a range of frozen food products in the United Kingdom and internationally. The company offers frozen fish products, including fish fingers, coated fish, and natural fish; ready-to-cook vegetable products, such as peas and spinach; and frozen poultry and meat products comprising nuggets, grills, and burgers. It also provides meal products that include ready-to-cook noodles, pasta, lasagna, pancakes, and other ready-made meals; ice creams, such as in-home and out-of-home ice creams; and other products consisting of soups, pizzas, bakery goods, and meat substitutes. The company sells its products to supermarkets and food retail chains primarily under the Birds Eye, Green Cuisine, iglo, Findus, Aunt Bessie's, Goodfella's, Frikom, Ledo, La Cocinera, and Belviva brand names. Nomad Foods Limited was founded in 2014 and is headquartered in Feltham, the United Kingdom.