US Foods (NYSE:USFD) and Chefs’ Warehouse (NASDAQ:CHEF) Critical Contrast

Chefs’ Warehouse (NASDAQ:CHEF) and US Foods (NYSE:USFD) are both consumer staples companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, risk, valuation, profitability and institutional ownership.

Volatility and Risk

Chefs’ Warehouse has a beta of 1.3, indicating that its share price is 30% more volatile than the S&P 500. Comparatively, US Foods has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Chefs’ Warehouse and US Foods, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chefs’ Warehouse	1	2	6	0	2.56
US Foods	0	2	9	0	2.82

Chefs’ Warehouse presently has a consensus price target of $74.71, indicating a potential upside of 11.70%. US Foods has a consensus price target of $90.00, indicating a potential downside of 0.04%. Given Chefs’ Warehouse’s higher possible upside, research analysts plainly believe Chefs’ Warehouse is more favorable than US Foods.

Profitability

This table compares Chefs’ Warehouse and US Foods’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chefs’ Warehouse	1.85%	14.11%	4.15%
US Foods	1.43%	17.71%	5.88%

Valuation and Earnings

This table compares Chefs’ Warehouse and US Foods”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chefs’ Warehouse	$3.79 billion	0.72	$55.48 million	$1.70	39.35
US Foods	$37.88 billion	0.53	$494.00 million	$2.40	37.52

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

Insider & Institutional Ownership

91.6% of Chefs’ Warehouse shares are held by institutional investors. Comparatively, 98.8% of US Foods shares are held by institutional investors. 11.5% of Chefs’ Warehouse shares are held by insiders. Comparatively, 0.6% of US Foods shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

US Foods beats Chefs’ Warehouse on 8 of the 14 factors compared between the two stocks.

About Chefs’ Warehouse

The Chefs’ Warehouse, Inc., together with its subsidiaries, distributes specialty food and center-of-the-plate products in the United States, the Middle East, and Canada. The company’s product portfolio includes specialty food products, such as artisan charcuterie, specialty cheeses, unique oils and vinegars, truffles, caviar, chocolate, and pastry products; and center-of-the-plate products consisting of custom cut beef, seafood, and hormone-free poultry, as well as broadline food products comprising cooking oils, butter, eggs, milk, and flour. The company serves menu-driven independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolatiers, cruise lines, casinos, and specialty food stores. It markets its center-of-the-plate products directly to consumers through a mail and e-commerce platform. The Chefs’ Warehouse, Inc. was founded in 1985 and is headquartered in Ridgefield, Connecticut.

About US Foods

US Foods Holding Corp., together with its subsidiaries, engages in marketing, sale, and distribution of fresh, frozen, and dry food and non-food products to foodservice customers in the United States. The company's customers include independently owned single and multi-unit restaurants, regional concepts, national restaurant chains, hospitals, nursing homes, hotels and motels, country clubs, government and military organizations, colleges and universities, and retail locations. The company was formerly known as USF Holding Corp. and changed its name to US Foods Holding Corp. in February 2016. US Foods Holding Corp. was incorporated in 2007 and is headquartered in Rosemont, Illinois.