Analyzing Blue Buffalo Pet Products (BUFF) and Freshpet (FRPT)

Blue Buffalo Pet Products (NASDAQ: BUFF) and Freshpet (NASDAQ:FRPT) are both consumer staples companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, profitabiliy, dividends, analyst recommendations, institutional ownership, earnings and risk.

Analyst Ratings

This is a summary of current ratings for Blue Buffalo Pet Products and Freshpet, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Blue Buffalo Pet Products	1	3	6	1	2.64
Freshpet	0	4	3	0	2.43

Blue Buffalo Pet Products presently has a consensus price target of $28.56, indicating a potential upside of 23.56%. Freshpet has a consensus price target of $14.25, indicating a potential downside of 18.34%. Given Blue Buffalo Pet Products’ stronger consensus rating and higher probable upside, equities analysts plainly believe Blue Buffalo Pet Products is more favorable than Freshpet.

Valuation & Earnings

This table compares Blue Buffalo Pet Products and Freshpet’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Blue Buffalo Pet Products	$1.17 billion	3.89	$273.36 million	$0.68	33.99
Freshpet	$136.11 million	4.08	$7.51 million	($0.13)	-134.22

Blue Buffalo Pet Products has higher revenue and earnings than Freshpet. Freshpet is trading at a lower price-to-earnings ratio than Blue Buffalo Pet Products, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Blue Buffalo Pet Products and Freshpet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Blue Buffalo Pet Products	11.69%	122.62%	25.78%
Freshpet	-3.14%	-4.06%	-3.41%

Risk and Volatility

Blue Buffalo Pet Products has a beta of 1.97, meaning that its share price is 97% more volatile than the S&P 500. Comparatively, Freshpet has a beta of 1.87, meaning that its share price is 87% more volatile than the S&P 500.

Insider & Institutional Ownership

88.9% of Blue Buffalo Pet Products shares are held by institutional investors. Comparatively, 61.7% of Freshpet shares are held by institutional investors. 7.7% of Blue Buffalo Pet Products shares are held by insiders. Comparatively, 8.2% of Freshpet shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Blue Buffalo Pet Products beats Freshpet on 12 of the 14 factors compared between the two stocks.

Blue Buffalo Pet Products Company Profile

Blue Buffalo Pet Products, Inc. (BBPP) is a holding company. The Company operates as a pet food company. The Company, through its subsidiaries, develops, produces, markets and sells pet food under product lines, including BLUE Life Protection Formula, BLUE Wilderness, BLUE Basics, BLUE Freedom and BLUE Natural Veterinary Diet lines. Its product lines of pet food include various product types for dogs and cats. The Company categorizes its products as dry foods, and wet foods, treats and other products. It has a product portfolio across various product types, including diet types, breed sizes for dogs, life stages, flavors, product functions, and textures and cuts for wet foods. BLUE Wilderness is a high-meat, high-protein and grain-free ancestral feeding line. BLUE Basics is a line of limited ingredient diet products for pets with food sensitivities. BLUE Freedom is a grain-free line. BLUE Natural Veterinary Diet is a line of Therapeutic diets for pets, offered through veterinarians.

Freshpet Company Profile

Freshpet, Inc. is a manufacturer of fresh, refrigerated pet food distributed across North America. The Company operates in the segment of manufacturing, marketing and distribution of pet food and pet treats for dogs and cats. The Company’s products consist of dog food, cat food, and dog and cat treats. Its recipes include real, fresh meat and varying combinations of vegetables, leafy greens and anti-oxidant rich fruits, without the use of preservatives, additives or artificial ingredients. All of its products are sold under the Freshpet brand name, with ingredients, packaging and labeling customized by class of retail. It also offers fresh treats across all classes of retail under the Dognation and Dog Joy labels. The Company’s products are available in various forms, including slice and serve rolls, bagged meals and tubs. All of the Company’s products are manufactured in the United States.