Snyder’s-Lance, Inc. (NASDAQ:LNCE) and Campbell Soup Company (NASDAQ:CPB) are both Consumer Goods companies that recently hit new highs. Naturally, this has created a bit of a stir amongst investors. We will compare the two companies across various metrics including growth, profitability, risk, return, dividends, and valuation to determine if one is a better choice than the other.
Snyder’s-Lance, Inc. (NASDAQ:LNCE) operates in the Processed & Packaged Goods segment of the Consumer Goods sector. The company has grown sales at a 5.20% annual rate over the past five years, putting it in the medium growth category. LNCE has a net profit margin of -2.30% and is less profitable than the average company in the Processed & Packaged Goods industry. LNCE’s financial leverage ratio is 1, which indicates that the company’s asset base is primarily funded by equity capital. Company’s return on equity, which is really just the product of the company’s profit margin, asset turnover, and financial leverage ratios, is -2.70%, which is worse than the Processed & Packaged Goods industry average ROE.
Snyder’s-Lance, Inc. (LNCE) pays out an annual dividend of 0.64 per share. At the current valuation, this equates to a dividend yield of 1.28%.Stock’s free cash flow yield, which represents the amount of cash available to investors before dividends, expressed as a percentage of the stock price, is 0.24. The average investment recommendation for LNCE, taken from a group of Wall Street Analysts, is 2.80, or a hold.
Over the past three months, Snyder’s-Lance, Inc. insiders have been net buyers, dumping a net of -240,591 shares. This implies that insiders have been feeling relatively bearish about the outlook for LNCE. Insider activity and sentiment signals are important to monitor because they can shed light on how “risky” a stock is perceived to be at it’s current valuation. Knowing this, it makes sense to look at beta, a measure of market risk. LNCE has a beta of 0.55 and therefore an below average level of market volatility.
Campbell Soup Company (NYSE:CPB) operates in the Processed & Packaged Goods segment of the Consumer Goods sector. CPB has increased sales at a 1.90% CAGR over the past five years, and is considered a low growth stock. The company has a net profit margin of 11.10% and is more profitable than the average Processed & Packaged Goods player. CPB’s asset turnover ratio is 1.03 and the company has financial leverage of 3.59. CPB’s return on equity of 55.50% is better than the Processed & Packaged Goods industry average.
Campbell Soup Company (CPB) pays a dividend of 1.40, which translates to dividend yield of 2.98% based on the current price. Stock has a payout ratio of 48.70%. According to this ratio, CPB should be able to continue making payouts at these levels. The company trades at a free cash flow yield of 0.13 and has a P/E of 16.43. Compared to the average company in the 21.61 space, CPB is relatively cheap. The average analyst recommendation for CPB is 3.10, or a hold. The average analyst recommendation for CPB is 3.10, or a hold.
Campbell Soup Company insiders have bought a net of 5,127 shares during the past three months, which implies that the company’s top executives have been feeling bullish about the stock’s outlook. Finally, CPB’s beta of 0.33 indicates that the stock has an below average level of market risk.
Snyder’s-Lance, Inc. (NYSE:CPB) scores higher than Campbell Soup Company (NASDAQ:LNCE) on 7 of the 13 measures compared between the two companies. CPB has the better fundamentals, scoring higher on profitability, efficiency and return metrics. CPB has better insider activity and sentiment signals.