Kraft Heinz (KHC) & Bunge (BG) Critical Comparison

Kraft Heinz (NASDAQ: KHC) and Bunge (NYSE:BG) are both large-cap non-cyclical consumer goods & services companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, valuation, risk, institutional ownership, dividends, profitability and earnings.

Valuation & Earnings

This table compares Kraft Heinz and Bunge’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kraft Heinz $26.49 billion 3.42 $3.63 billion $3.21 23.13
Bunge $42.94 billion 0.26 $745.00 million $3.27 24.74

Kraft Heinz has higher earnings, but lower revenue than Bunge. Kraft Heinz is trading at a lower price-to-earnings ratio than Bunge, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

61.9% of Kraft Heinz shares are owned by institutional investors. Comparatively, 77.7% of Bunge shares are owned by institutional investors. 26.9% of Kraft Heinz shares are owned by insiders. Comparatively, 1.3% of Bunge shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Kraft Heinz pays an annual dividend of $2.50 per share and has a dividend yield of 3.4%. Bunge pays an annual dividend of $1.84 per share and has a dividend yield of 2.3%. Kraft Heinz pays out 77.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Bunge pays out 56.3% of its earnings in the form of a dividend. Bunge has raised its dividend for 16 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and price targets for Kraft Heinz and Bunge, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kraft Heinz 0 4 11 0 2.73
Bunge 0 4 4 0 2.50

Kraft Heinz presently has a consensus target price of $93.00, indicating a potential upside of 25.24%. Bunge has a consensus target price of $81.00, indicating a potential upside of 0.14%. Given Kraft Heinz’s stronger consensus rating and higher probable upside, equities analysts plainly believe Kraft Heinz is more favorable than Bunge.

Profitability

This table compares Kraft Heinz and Bunge’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kraft Heinz 15.03% 7.49% 3.63%
Bunge 1.06% 6.68% 2.26%

Summary

Kraft Heinz beats Bunge on 10 of the 16 factors compared between the two stocks.

Kraft Heinz Company Profile

The Kraft Heinz Company is a food and beverage company. The Company is engaged in the manufacturing and marketing of food and beverage products, including condiments and sauces, cheese and dairy, meals, meats, refreshment beverages, coffee and other grocery products. The Company’s segments include the United States, Canada and Europe. The Company’s remaining businesses are combined as Rest of World. The Rest of World consists of Latin America and Asia, Middle East and Africa (AMEA). The Company provides products for various occasions whether at home, in restaurants or on the go. The Company’s brands include Heinz, Kraft, Oscar Mayer, Philadelphia, Planters, Velveeta, Lunchables, Maxwell House, Capri Sun, and Ore-Ida. The Company’s products are sold through its own sales organizations and through independent brokers, agents and distributors to chain, wholesale, cooperative and independent grocery accounts, convenience stores, drug stores, value stores, bakeries and pharmacies.

Bunge Company Profile

Bunge Limited is an agribusiness and food company with integrated operations that stretch from the farm field to consumer foods. The Company operates through five segments: Agribusiness, Edible Oil Products, Milling Products, Sugar and Bioenergy, and Fertilizer. Its Agribusiness segment is an integrated, global business involved in the purchase, storage, transport, processing and sale of agricultural commodities and commodity products. Its edible oil products include packaged and bulk oils, shortenings, margarines, mayonnaise and other products derived from the vegetable oil refining process. Its milling products segment includes the production and sale of a range of wheat flours and bakery mixes. The Company is a producer and exporter of sugar. Through the Company’s operations in Argentina, it produces, blends and distributes a range of nitrogen, phosphate and potassium (NPK) fertilizers, including phosphate-based liquid and solid nitrogen fertilizers.

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