NEW YORK (TheStreet) -- Memorial Day is the unofficial start of hot dog season.
Get out the grill. Go to a ballgame. Go to a beach or a park and start a fire. Or just shut the kids up with the easy meal solution of meat in tube form.
The two largest hot dog producers are Hillshire Brands' (HSH) BallPark Franks and Kraft's (KRFT) Oscar Meyer and they make a great contrast for investors. They're close in size, with BallPark having sales of $565 million and Oscar Meyer bringing in $523 million last year.
Kraft is conservative, focused on returning cash to shareholders. Hillshire is aggressive, focused on growth.
Kraft started the hot dog season with some unpleasant headlines, a recall of 96,000 pounds of wieners. It wasn't really a health scare, more a case of mislabeling cheese dogs as meat ones, but it is emblematic of a key difference between the two companies.
Kraft is primarily a dairy company, with nine different cheese brands including Philadelphia Cream Cheese, Breakstone cottage cheese, Polly-O mozzarella and Velveeta processed cheese.
Hillshire, by contrast, is mainly a meat company. Hillshire Farms is deli meats. Jimmy Dean is sausages. Aidelis is chicken sausage. Gallo Salame is, well, salami. State Fair wraps hot dogs in corn batter and produces corn dogs. Even its Sara Lee bakeries have a deli meat brand.
Oscar Meyer is one of 30 brands run by Kraft, which had revenue of $18.2 billion last year and net income of $2.71 billion, or $4.83 per share. Hillshire lists 15 core brands, and turned in revenue last year of $2.9 billion, with $184 million in profit, or $1.88 per share.
It's in their boardrooms that you'll find the biggest difference.
Kraft is the product of a 2012 spinoff that turned its snack food unit into Mondelez (MDLZ). At the time the company said Mondelez brands like Oreo, Nabisco, Cadbury and Gevalia were taking marketing attention from its "basic" products, and the split would help Kraft concentrate on them.
Since then, Mondelez shares are down over 10% while those of Kraft are up almost 25%. Kraft has become a solid yield stock, its 52 cent-per-share quarterly dividend delivering a yield of 3.66%.
Until the dividend is threatened, weakness is a chance to get a higher yield. Right now less than half of net income goes out as dividends. Thus the stock only fell .5% in the face of a recent cheese recall.
Hillshire CEO Sean Connolly, by contrast, is focused mostly on growth, backed by Citadel LLC, a hedge fund run by Kenneth Griffin, which recently raised his stake in the company to 5% of the common.
Last year, Connolly bought Golden Island, which makes sense since it makes meat jerky. He followed it up with a $165 million deal to buy Van's Natural Foods, which makes frozen waffles, from a private equity firm.
The prize here is Birds Eye, the frozen food giant. But is the prize worth the price? TheStreet has downgraded the stock.
The price is 50% above Hillshire's current $4.4 billion market cap, and gives Pinnacle holders nearly one-third of the resulting company, plus $18 in cash per share. The resulting company will have to take on more debt to pay that $2.1 billion in cash -- Hillshire listed just $2.5 billion in total assets in March.
This deal also has private capital's handwriting on it -- Pinnacle was spun-out by Blackstone just a year ago after being acquired in 2007 -- and while some feel the price is too high given Hillshire's size, plus the debt load, a shareholder's rights attorney is sniffing about the deal claiming the price is too low.
Hillshire itself is a spinoff. It's most of the former Sara Lee, which chose the Hillshire name while spinning-off its international operations into D.E. Master Blenders in 2012, after selling the fresh bakery businesses to Grupo Bimbo of Mexico.
The business resulting from the Pinnacle deal will have annual sales of $6.6 billion, still only one-third the size of Kraft, but with a bullet.
So would you like profits or growth with that hot dog? This is America -- you get your choice.
At the time of publication the author owned no shares in companies mentioned in this story.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.