Cal-Maine Vs Vital Farms: Which Egg Stock Should Be in Your Basket?

Industry Overview - Cal-Maine Foods, Inc. (CALM) and Vital Farms, Inc. (VITL) are significant players in the egg industry, adapting to changing consumer preferences for ethical and sustainable farming practices [1] - Egg prices have surged due to supply disruptions from avian influenza, with 40.2 million birds depopulated in 2024 and an additional 33.5 million in 2025 [4] - Despite recent price declines, demand for eggs remains strong, particularly for cage-free and pasture-raised options, driven by health and ethical considerations [5] Company Profiles Cal-Maine Foods - Based in Ridgeland, MS, Cal-Maine Foods has a market capitalization of $4.6 billion and is the largest producer and distributor of fresh shell eggs in the U.S. [2] - In Q3 fiscal 2025, CALM reported earnings per share of $10.38, up from $3.00 year-over-year, with revenues increasing 102% to $1.42 billion [7] - The company is investing $60 million in capital projects to expand cage-free production capacity, anticipating compliance with new legislation in 10 states by 2030 [8] - Recent acquisitions, including Echo Lake Foods, are expected to enhance production capacity and lower costs [10] Vital Farms - Vital Farms, based in Austin, TX, has a market capitalization of $1.5 billion and is a leading brand of pasture-raised eggs in the U.S. [3] - In Q1 fiscal 2025, VITL reported a 9.6% revenue increase to $148 million, but earnings declined 14% to 37 cents due to increased investments in crew members [11] - The company is expanding its supply chain, with 450 family farmers and products available in 26,000 retail stores [12] - VITL aims to reach $1 billion in net revenues by 2027, with an adjusted EBITDA margin target of 12-14% [15] Financial Comparisons - The Zacks Consensus Estimate for CALM's fiscal 2025 earnings is $22.73, indicating a 299.5% year-over-year increase, while VITL's estimate is $1.25, reflecting a 5.9% rise [16][17] - CALM's stock has gained 57.6% over the past year, contrasting with VITL's 18% decline [20] - CALM has a forward earnings multiple of 16.00, while VITL's is 24.59 [21] - CALM's return on equity stands at 48.72%, significantly higher than VITL's 19.53% [23] - CALM offers a dividend yield of 14.7%, whereas VITL does not pay dividends [24] Investment Outlook - Cal-Maine Foods is positioned for long-term growth through capacity expansion and product diversification, while Vital Farms focuses on brand awareness and customer reach [26] - CALM is rated Zacks Rank 1 (Strong Buy) with a Value Score of A, making it a more compelling investment compared to VITL, which has a Zacks Rank 3 (Hold) and a Value Score of C [27]