Mama’s Creations (NASDAQ:MAMA) and Marzetti (NASDAQ:MZTI) Critical Review

Mama’s Creations (NASDAQ:MAMA) and Marzetti (NASDAQ:MZTI) are both consumer staples companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, earnings and profitability.

Analyst Recommendations

This is a breakdown of recent ratings for Mama’s Creations and Marzetti, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mama’s Creations	0	1	5	0	2.83
Marzetti	1	2	1	0	2.00

Mama’s Creations currently has a consensus target price of $18.80, indicating a potential upside of 26.60%. Marzetti has a consensus target price of $169.33, indicating a potential upside of 47.64%. Given Marzetti’s higher possible upside, analysts plainly believe Marzetti is more favorable than Mama’s Creations.

Valuation & Earnings

This table compares Mama’s Creations and Marzetti”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mama’s Creations	$171.71 million	3.52	$5.29 million	$0.12	123.75
Marzetti	$1.91 billion	1.65	$167.35 million	$6.39	17.95

Marzetti has higher revenue and earnings than Mama’s Creations. Marzetti is trading at a lower price-to-earnings ratio than Mama’s Creations, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Mama’s Creations has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500. Comparatively, Marzetti has a beta of 0.38, suggesting that its stock price is 62% less volatile than the S&P 500.

Institutional & Insider Ownership

45.2% of Mama’s Creations shares are held by institutional investors. Comparatively, 66.4% of Marzetti shares are held by institutional investors. 6.5% of Mama’s Creations shares are held by insiders. Comparatively, 29.1% of Marzetti 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.

Profitability

This table compares Mama’s Creations and Marzetti’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mama’s Creations	3.06%	15.31%	8.85%
Marzetti	9.06%	18.12%	14.01%

Summary

Marzetti beats Mama’s Creations on 9 of the 14 factors compared between the two stocks.

About Mama’s Creations

Mama’s Creations, Inc. engages in the marketing, manufacturing, and distribution of beef meatballs with sauce, turkey meatballs with sauce, beef meat loaf, sausage and peppers, chicken parmesan, and other similar meats and sauces. Its products include beef meatballs, turkey meatballs, stuffed meatballs, lasagna roll ups, retail ready meals, bulk deli, single-size pasta bowls, and packaged refrigerated products. Its brands include MamaMancini’s, Creative Salads, and The Olive Branch. The company was founded by Daniel Dougherty on July 22, 2009 and is headquartered in East Rutherford, NJ.

About Marzetti

Lancaster Colony Corporation engages in the manufacturing and marketing of specialty food products for the retail and foodservice channels in the United States. It operates in two segments, Retail and Foodservice. The company offers frozen garlic bread under the New York BRAND Bakery; frozen Parkerhouse style yeast and dinner rolls under the Sister Schubert's brand; salad dressings under the Marzetti, Simply Dressed, Cardini's, and Girard's brands; vegetable and fruit dips under the Marzetti brand; croutons and salad toppings under the New York BRAND Bakery, Chatham Village, and Marzetti brands; and frozen pasta under the Marzetti Frozen Pasta brand. It also manufactures and sells other products to brand license agreements, including Olive Garden dressings, Buffalo Wild Wings sauces, and Chick-fil-A sauces. The company sells its products through sales personnel, food brokers, and distributors to retailers and restaurants. Lancaster Colony Corporation was incorporated in 1961 and is based in Westerville, Ohio.