Vital Farms (NASDAQ:VITL) & Tofutti Brands (OTCMKTS:TOFB) Critical Contrast

Tofutti Brands (OTCMKTS:TOFB) and Vital Farms (NASDAQ:VITL) 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 profitability, institutional ownership, valuation, earnings, dividends, analyst recommendations and risk.

Analyst Ratings

This is a summary of current recommendations and price targets for Tofutti Brands and Vital Farms, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tofutti Brands	0	0	0	0	0.00
Vital Farms	1	3	9	0	2.62

Vital Farms has a consensus price target of $45.00, suggesting a potential upside of 228.71%. Given Vital Farms’ stronger consensus rating and higher probable upside, analysts clearly believe Vital Farms is more favorable than Tofutti Brands.

Profitability

This table compares Tofutti Brands and Vital Farms’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tofutti Brands	-7.93%	-22.08%	-16.26%
Vital Farms	8.73%	20.69%	14.66%

Risk & Volatility

Tofutti Brands has a beta of 0.84, indicating that its share price is 16% less volatile than the S&P 500. Comparatively, Vital Farms has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500.

Valuation and Earnings

This table compares Tofutti Brands and Vital Farms”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tofutti Brands	$8.82 million	0.46	-$860,000.00	($0.13)	-6.04
Vital Farms	$759.44 million	0.81	$66.28 million	$1.44	9.51

Vital Farms has higher revenue and earnings than Tofutti Brands. Tofutti Brands is trading at a lower price-to-earnings ratio than Vital Farms, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

5.1% of Tofutti Brands shares are held by institutional investors. Comparatively, 98.6% of Vital Farms shares are held by institutional investors. 9.3% of Tofutti Brands shares are held by company insiders. Comparatively, 21.3% of Vital Farms shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Vital Farms beats Tofutti Brands on 13 of the 13 factors compared between the two stocks.

About Tofutti Brands

Tofutti Brands Inc. engages in the development, production, and marketing of plant based, dairy free vegan frozen desserts, cheeses, and other food products under the TOFUTTI brand in the United States, Europe, the Middle East, the Asia Pacific, and Africa. The company offers frozen desserts, including frozen sandwiches and chocolate wafers; ice cream sandwiches; dairy free vegan cheese products, such as cream cheese, sour cream, cheese slices, and dairy free ricotta cheese alternatives; spreads; and frozen food products. It sells its products through independent unaffiliated food brokers to distributors, as well as on a direct basis to retail chain accounts or to warehouse accounts that directly service chain accounts. Tofutti Brands, Inc. was founded in 1981 and is based in Cranford, New Jersey.

About Vital Farms

Vital Farms, Inc., a food company, provides pasture-raised products in the United States. It offers shell eggs, butter, hard-boiled eggs, and liquid whole eggs. The company was founded in 2007 and is headquartered in Austin, Texas.