Ajinomoto (OTCMKTS:AJINY) and J. M. Smucker (NYSE:SJM) Financial Analysis

J. M. Smucker (NYSE:SJM) and Ajinomoto (OTCMKTS:AJINY) are both large-cap consumer staples companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, analyst recommendations, earnings and profitability.

Analyst Ratings

This is a summary of recent ratings for J. M. Smucker and Ajinomoto, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
J. M. Smucker	1	9	10	0	2.45
Ajinomoto	0	2	0	1	2.67

J. M. Smucker currently has a consensus target price of $117.25, suggesting a potential upside of 22.84%. Given J. M. Smucker’s higher possible upside, analysts plainly believe J. M. Smucker is more favorable than Ajinomoto.

Dividends

J. M. Smucker pays an annual dividend of $4.40 per share and has a dividend yield of 4.6%. Ajinomoto pays an annual dividend of $0.18 per share and has a dividend yield of 0.6%. J. M. Smucker pays out -37.3% of its earnings in the form of a dividend. Ajinomoto pays out 21.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. J. M. Smucker has raised its dividend for 27 consecutive years. J. M. Smucker is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

81.7% of J. M. Smucker shares are owned by institutional investors. 2.2% of J. M. Smucker shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares J. M. Smucker and Ajinomoto”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
J. M. Smucker	$8.93 billion	1.14	-$1.23 billion	($11.79)	-8.10
Ajinomoto	$10.05 billion	2.72	$463.80 million	$0.83	33.69

Ajinomoto has higher revenue and earnings than J. M. Smucker. J. M. Smucker is trading at a lower price-to-earnings ratio than Ajinomoto, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares J. M. Smucker and Ajinomoto’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
J. M. Smucker	-14.07%	15.94%	5.37%
Ajinomoto	N/A	N/A	N/A

Risk and Volatility

J. M. Smucker has a beta of 0.27, suggesting that its stock price is 73% less volatile than the S&P 500. Comparatively, Ajinomoto has a beta of 0.5, suggesting that its stock price is 50% less volatile than the S&P 500.

About J. M. Smucker

The J. M. Smucker Company manufactures and markets branded food and beverage products worldwide. It operates in three segments: U.S. Retail Pet Foods, U.S. Retail Coffee, and U.S. Retail Consumer Foods. The company offers mainstream roast, ground, single serve, and premium coffee; peanut butter and specialty spreads; fruit spreads, toppings, and syrups; jelly products; nut mix products; shortening and oils; frozen sandwiches and snacks; pet food and pet snacks; and foodservice hot beverage, foodservice portion control, and flour products, as well as dog and cat food, frozen handheld products, juices and beverages, and baking mixes and ingredients. It provides its products under the Meow Mix, Milk-Bone, Pup-Peroni, Canine Carry Outs, Folgers, Café Bustelo, Dunkin', Folgers, Café Bustelo, 1850, Jif, Smucker's, Smucker's Uncrustables, Robin Hood, and Five Roses. The company sells its products through direct sales and brokers to food retailers, club stores, discount and dollar stores, online retailers, pet specialty stores, natural foods stores and distributors, drug stores, military commissaries, and mass merchandisers. Smucker Company was founded in 1897 and is headquartered in Orrville, Ohio.

About Ajinomoto

Ajinomoto Co., Inc. engages in the seasonings and foods, frozen foods, and healthcare and other businesses in Japan and internationally. The Seasonings and Foods segment offers sauces and seasoning products under the AJI-NO-MOTO, HON-DASHI, Cook Do, Ajinomoto KK Consommé, Pure Select Mayonnaise, Ros Dee, Masako, Aji-ngon, Sazón, Sajiku, and CRISPY FRY names; and solutions and ingredients for foodservice and processed food manufacturers, processed foods, and restaurants, as well as industrial, retail, and other applications. This segment also provides instant noodles under the Knorr Cup Soup and YumYum names; coffee beverages under the Birdy and Blendy brands; powdered drink under the Birdy 3in1 name; MAXIM brand products; Chyotto Zeitakuna Kohiten brand products; and gift sets and office supplies comprising coffee vending machines, tea servers, etc. The Frozen Foods segment offers Chinese dumplings, cooked rice, noodles, desserts, shumai, processed chicken, and other products under the AJINOMOTO FRESH FROZEN, Bernardi, FRED’S, Golden Tiger, José Olé, LingLing, POSADA, and TAI PEI brands. The Healthcare and Other segment provides amino acids for applications in various industries, such as pharmaceuticals and foods; contract development and manufacturing services for pharmaceutical intermediates and active ingredients, aseptic fill finish services, etc.; personal care ingredients; and medical foods, crop services, etc. This segment also offers Ajinomoto Build-up Film, an interlayer insulating material for semiconductor packages; fundamental foods under the Glyna and Amino Aile names; sports nutrition supplements under the amino VITAL brand; and functional materials, such as activated carbon, release paper, etc. Ajinomoto Co., Inc. was founded in 1909 and is headquartered in Tokyo, Japan.