Critical Contrast: US Foods (USFD) & Performance Food Group (PFGC)

US Foods (NYSE: USFD) and Performance Food Group (NYSE:PFGC) are both mid-cap consumer staples companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, institutional ownership, risk, earnings, analyst recommendations, dividends and profitability.

Analyst Ratings

This is a breakdown of recent ratings for US Foods and Performance Food Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
US Foods 0 3 6 0 2.67
Performance Food Group 0 4 5 0 2.56

US Foods currently has a consensus price target of $31.75, indicating a potential upside of 2.42%. Performance Food Group has a consensus price target of $30.71, indicating a potential downside of 2.34%. Given US Foods’ stronger consensus rating and higher probable upside, analysts plainly believe US Foods is more favorable than Performance Food Group.

Volatility & Risk

US Foods has a beta of 1.38, indicating that its share price is 38% more volatile than the S&P 500. Comparatively, Performance Food Group has a beta of -0.21, indicating that its share price is 121% less volatile than the S&P 500.

Valuation and Earnings

This table compares US Foods and Performance Food Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
US Foods $22.92 billion 0.30 $209.79 million $1.17 26.50
Performance Food Group $16.76 billion 0.20 $96.30 million $1.03 30.53

US Foods has higher revenue and earnings than Performance Food Group. US Foods is trading at a lower price-to-earnings ratio than Performance Food Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares US Foods and Performance Food Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
US Foods 1.11% 12.64% 3.61%
Performance Food Group 0.62% 15.02% 3.60%

Insider and Institutional Ownership

96.9% of US Foods shares are held by institutional investors. Comparatively, 82.4% of Performance Food Group shares are held by institutional investors. 1.6% of US Foods shares are held by company insiders. Comparatively, 3.7% of Performance Food Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

US Foods beats Performance Food Group on 11 of the 14 factors compared between the two stocks.

About US Foods

US Foods Holding Corp. is a holding company. The Company is a foodservice distributor in the United States. The Company, through US Foods, Inc. (USF), markets and primarily distributes fresh, frozen and dry food and non-food products to foodservice customers throughout the United States. These customers include independently owned single and multi-unit restaurants, regional concepts, national restaurant chains, hospitals, nursing homes, hotels and motels, country clubs, government and military organizations, colleges and universities, and retail locations. As of December 31, 2016, the Company provided approximately 400,000 fresh, frozen, and dry food stock-keeping units (SKUs), as well as non-food items, sourced from over 5,000 suppliers. As of January 31, 2017, it maintained 75 primary operating facilities, consisting of its 60 distribution centers and other supporting facilities.

About Performance Food Group

Performance Food Group Company, through its subsidiaries, markets and distributes food and food-related products. The Company operates through three segments: Performance Foodservice, PFG Customized and Vistar. The Performance Foodservice segment distributes a range of national brands, customer brands, and branded food and food-related products. It sells to independent or street, and multi-unit or chain, restaurants and other institutions. Its PFG Customized segment provides service to family and casual dining restaurant chains, and fast casual and quick service restaurant chains. Its Vistar segment specializes in distributing candy, snacks, beverages and other items nationally to the vending, office coffee service, theater, hospitality and other channels. Its products include a range of frozen foods, such as meats, fully prepared appetizers and entrees, and desserts; a range of canned and dry foods; fresh meats; dairy products; beverage products, and snack and other products.

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