Analyzing Armanino Foods of Distinction (OTCMKTS:AMNF) & Medifast (NYSE:MED)

Armanino Foods of Distinction (OTCMKTS:AMNF) and Medifast (NYSE:MED) are both small-cap consumer staples companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, earnings, risk, dividends, institutional ownership and profitability.

Institutional and Insider Ownership

0.1% of Armanino Foods of Distinction shares are owned by institutional investors. Comparatively, 95.5% of Medifast shares are owned by institutional investors. 30.2% of Armanino Foods of Distinction shares are owned by insiders. Comparatively, 3.7% of Medifast 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.

Risk & Volatility

Armanino Foods of Distinction has a beta of 0.07, suggesting that its share price is 93% less volatile than the S&P 500. Comparatively, Medifast has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Armanino Foods of Distinction and Medifast, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Armanino Foods of Distinction	0	1	1	1	3.00
Medifast	1	1	0	0	1.50

Armanino Foods of Distinction presently has a consensus price target of $15.00, suggesting a potential upside of 41.51%. Medifast has a consensus price target of $12.00, suggesting a potential downside of 5.21%. Given Armanino Foods of Distinction’s stronger consensus rating and higher probable upside, analysts clearly believe Armanino Foods of Distinction is more favorable than Medifast.

Profitability

This table compares Armanino Foods of Distinction and Medifast’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Armanino Foods of Distinction	25.06%	49.10%	35.60%
Medifast	-5.78%	-4.80%	-3.83%

Valuation & Earnings

This table compares Armanino Foods of Distinction and Medifast”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Armanino Foods of Distinction	$76.10 million	4.33	$18.80 million	$0.62	17.10
Medifast	$385.79 million	0.36	-$18.67 million	($1.83)	-6.92

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

Summary

Armanino Foods of Distinction beats Medifast on 12 of the 15 factors compared between the two stocks.

About Armanino Foods of Distinction

Armanino Foods of Distinction, Inc. produces and markets frozen food products in the United States. The company offers gourmet beef, Italian style beef and pork, and smoked turkey meatballs; grated parmesan and 3 cheese blend cheese; and various pesto, such as basil, artichoke, cilantro, dried tomato and garlic, roasted garlic, roasted red bell pepper, and southwest chipotle. It also provides frozen pasta, which includes beef cannelloni, cheese manicotti, cheese stuffed shells, cheese tortellini; pasta sheets, potato gnocchi, and tricolor cheese tortellini, as well as beef, butternut squash, four cheese, cheese and spinach, and wild mushroom ravioli; and various sauces, comprising creamy garlic, alfresco, Bolognese, chimichurri, harissa, and romesco. The company offers its products under the Armanino brand. It markets its products through a network of food brokers and sells to retail and foodservice distributors, club-type stores, and industrial accounts. The company was founded in 1978 and is based in Hayward, California.

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.