Flowers Foods (NYSE:FLO) and Schweitzer-Mauduit International (NYSE:SWM) are both consumer staples companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, institutional ownership and profitability.
Profitability
This table compares Flowers Foods and Schweitzer-Mauduit International's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Flowers Foods | 2.30% | 19.41% | 7.65% |
| Schweitzer-Mauduit International | 8.58% | 19.15% | 7.38% |
Dividends
Flowers Foods pays an annual dividend of $0.80 per share and has a dividend yield of 3.4%. Schweitzer-Mauduit International pays an annual dividend of $1.76 per share and has a dividend yield of 3.6%. Flowers Foods pays out 83.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Schweitzer-Mauduit International pays out 49.6% of its earnings in the form of a dividend. Flowers Foods has increased its dividend for 7 consecutive years and Schweitzer-Mauduit International has increased its dividend for 1 consecutive years. Schweitzer-Mauduit International is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility & Risk
Flowers Foods has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500. Comparatively, Schweitzer-Mauduit International has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500.
Valuation & Earnings
This table compares Flowers Foods and Schweitzer-Mauduit International's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Flowers Foods | $4.12 billion | 1.23 | $164.54 million | $0.96 | 24.88 |
| Schweitzer-Mauduit International | $1.02 billion | 1.48 | $85.80 million | $3.55 | 13.59 |
Flowers Foods has higher revenue and earnings than Schweitzer-Mauduit International. Schweitzer-Mauduit International is trading at a lower price-to-earnings ratio than Flowers Foods, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of recent ratings for Flowers Foods and Schweitzer-Mauduit International, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Flowers Foods | 0 | 4 | 0 | 0 | 2.00 |
| Schweitzer-Mauduit International | 0 | 0 | 0 | 0 | N/A |
Flowers Foods presently has a consensus target price of $24.00, indicating a potential upside of 0.50%. Given Flowers Foods' higher probable upside, analysts clearly believe Flowers Foods is more favorable than Schweitzer-Mauduit International.
Insider & Institutional Ownership
64.5% of Flowers Foods shares are owned by institutional investors. Comparatively, 91.3% of Schweitzer-Mauduit International shares are owned by institutional investors. 8.2% of Flowers Foods shares are owned by company insiders. Comparatively, 1.4% of Schweitzer-Mauduit International shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Summary
Flowers Foods beats Schweitzer-Mauduit International on 8 of the 15 factors compared between the two stocks.
