Financial Analysis: Lamb Weston Holdings (LW) versus SiteOne Landscape Supply (SITE)

SiteOne Landscape Supply (NYSE: SITE) and Lamb Weston Holdings (NYSE:LW) are both mid-cap industrial products companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, valuation, risk, profitability, analyst recommendations, earnings and institutional ownership.

Earnings & Valuation

This table compares SiteOne Landscape Supply and Lamb Weston Holdings’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
SiteOne Landscape Supply $1.75 billion 1.15 $132.90 million $1.03 49.40
Lamb Weston Holdings $3.17 billion 2.07 $654.20 million N/A N/A

Lamb Weston Holdings has higher revenue and earnings than SiteOne Landscape Supply.

Dividends

Lamb Weston Holdings pays an annual dividend of $0.75 per share and has a dividend yield of 1.7%. SiteOne Landscape Supply does not pay a dividend.

Insider and Institutional Ownership

89.7% of SiteOne Landscape Supply shares are owned by institutional investors. Comparatively, 77.3% of Lamb Weston Holdings shares are owned by institutional investors. 4.0% of SiteOne Landscape Supply shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares SiteOne Landscape Supply and Lamb Weston Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SiteOne Landscape Supply 2.46% 29.22% 5.12%
Lamb Weston Holdings N/A N/A N/A

Analyst Recommendations

This is a summary of recent recommendations for SiteOne Landscape Supply and Lamb Weston Holdings, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SiteOne Landscape Supply 0 2 2 0 2.50
Lamb Weston Holdings 0 3 4 1 2.75

SiteOne Landscape Supply presently has a consensus price target of $55.00, suggesting a potential upside of 8.10%. Lamb Weston Holdings has a consensus price target of $46.00, suggesting a potential upside of 2.66%. Given SiteOne Landscape Supply’s higher probable upside, equities analysts plainly believe SiteOne Landscape Supply is more favorable than Lamb Weston Holdings.

About SiteOne Landscape Supply

SiteOne Landscape Supply, Inc. is a national wholesale distributor of landscape supplies in the United States and Canada. The Company is a supplier of irrigation, landscape lighting, hardscapes, lawn care supplies, nursery stock, and landscape accessories to green industry professionals. As of October 2, 2016, the Company had over 450 stores. The Company offers a selection of fertilizer and control products, such as herbicides, irrigation supplies, landscape accessories, nursery goods, hardscapes, including pavers, natural stones and blocks, and outdoor lighting products. The Company’s customers are primarily residential and commercial landscape professionals specializing in the designing, installation and maintenance of lawns, gardens, golf courses and other outdoor spaces. The Company offers various products, such as spreader settings, LESCO equipment specification sheets, golf course supplies, seed: golf and greentech specification binder.

About Lamb Weston Holdings

Lamb Weston Holdings, Inc. (Lamb Weston), is a supplier of frozen potato, sweet potato, appetizer and vegetable products to restaurants and retailers around the world. The Company’s segments include Global, Foodservice, Retail and Other. The Global segment includes operations associated with Lamb Weston’s business with large chain restaurant customers, whether those results are generated in the United States or abroad, as well as operations associated with retail and foodservice customers located outside of the United States and Canada. The Foodservice segment includes sales to a line of foodservice distribution customers in the United States and Canada. The Retail reporting segment includes sales to grocery, mass, club, and specialty retailers primarily in the United States. The Other segment includes the operations from Lamb Weston’s frozen vegetable business. It also includes the operations from Lamb Weston’s dairy business.

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