John B. Sanfilippo & Son (NASDAQ:JBSS – Get Free Report) and BAB (OTCMKTS:BABB – Get Free Report) are both small-cap consumer staples companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for John B. Sanfilippo & Son and BAB, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| John B. Sanfilippo & Son | 0 | 3 | 1 | 0 | 2.25 |
| BAB | 0 | 0 | 0 | 0 | 0.00 |
John B. Sanfilippo & Son currently has a consensus target price of $109.00, indicating a potential upside of 25.04%. Given John B. Sanfilippo & Son’s stronger consensus rating and higher possible upside, equities analysts plainly believe John B. Sanfilippo & Son is more favorable than BAB.
Volatility and Risk
Earnings and Valuation
This table compares John B. Sanfilippo & Son and BAB”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| John B. Sanfilippo & Son | $1.16 billion | 0.88 | $58.93 million | $5.70 | 15.29 |
| BAB | $3.44 million | 1.79 | $560,000.00 | $0.08 | 10.62 |
John B. Sanfilippo & Son has higher revenue and earnings than BAB. BAB is trading at a lower price-to-earnings ratio than John B. Sanfilippo & Son, indicating that it is currently the more affordable of the two stocks.
Dividends
John B. Sanfilippo & Son pays an annual dividend of $0.90 per share and has a dividend yield of 1.0%. BAB pays an annual dividend of $0.04 per share and has a dividend yield of 4.7%. John B. Sanfilippo & Son pays out 15.8% of its earnings in the form of a dividend. BAB pays out 50.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. John B. Sanfilippo & Son has increased its dividend for 8 consecutive years.
Profitability
This table compares John B. Sanfilippo & Son and BAB’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| John B. Sanfilippo & Son | 5.76% | 18.11% | 10.88% |
| BAB | 16.50% | 16.48% | 11.69% |
Institutional & Insider Ownership
70.6% of John B. Sanfilippo & Son shares are owned by institutional investors. 30.2% of John B. Sanfilippo & Son shares are owned by insiders. Comparatively, 33.7% of BAB shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Summary
John B. Sanfilippo & Son beats BAB on 12 of the 17 factors compared between the two stocks.
About John B. Sanfilippo & Son
John B. Sanfilippo & Son, Inc. engages in the processing and distribution of nuts and nut-related products. It offers peanuts, pecans, cashews, walnuts, almonds, and other nuts under the brands of Fisher, Orchard Valley Harvest, Squirrel Brand, and Southern Style Nuts. The company was founded by Gaspare Sanfilippo and John B. Sanfilippo in 1922 and is headquartered in Elgin, IL.
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.
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