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Blue Buffalo Pet Products (BUFF) vs. Freshpet (NASDAQ:FRPT) Critical Review

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

Freshpet has a beta of 1.87, suggesting that its stock price is 87% more volatile than the S&P 500. Comparatively, Blue Buffalo Pet Products has a beta of 1.95, suggesting that its stock price is 95% more volatile than the S&P 500. Profitability

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

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

Analyst Ratings This is a breakdown of current recommendations and price targets for Freshpet and Blue Buffalo Pet Products, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Freshpet 0 4 2 0 2.33
Blue Buffalo Pet Products 1 3 6 1 2.64

Freshpet currently has a consensus price target of £14.25, indicating a potential downside of 11.21%. Blue Buffalo Pet Products has a consensus price target of £28.00, indicating a potential upside of 27.39%.

Given Blue Buffalo Pet Products’ stronger consensus rating and higher possible upside, analysts clearly believe Blue Buffalo Pet Products is more favorable than Freshpet. Earnings and Valuation This table compares Freshpet and Blue Buffalo Pet Products’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Freshpet £136.11 million 3.75 £7.51 million (£0.13) -123.45
Blue Buffalo Pet Products £1.17 billion 3.70 £273.36 million £0.68 32.32

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. Institutional and Insider Ownership

65.5% of Freshpet shares are held by institutional investors. Comparatively, 88.9% of Blue Buffalo Pet Products shares are held by institutional investors.

8.2% of Freshpet shares are held by company insiders. Comparatively, 7.7% of Blue Buffalo Pet Products shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

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

Freshpet logoFreshpet, 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. About Blue Buffalo Pet Products

Blue Buffalo Pet Products logoBlue 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.

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References

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