McCormick & Company, Incorporated (NYSE:MKC – Get Free Report) and Ingredion (NYSE:INGR – Get Free Report) are both consumer staples companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, valuation, analyst recommendations, earnings, risk and institutional ownership.
Volatility and Risk
McCormick & Company, Incorporated has a beta of 0.65, meaning that its share price is 35% less volatile than the S&P 500. Comparatively, Ingredion has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500.
Dividends
McCormick & Company, Incorporated pays an annual dividend of $1.92 per share and has a dividend yield of 3.9%. Ingredion pays an annual dividend of $3.28 per share and has a dividend yield of 3.2%. McCormick & Company, Incorporated pays out 31.5% of its earnings in the form of a dividend. Ingredion pays out 31.6% 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. McCormick & Company, Incorporated has raised its dividend for 38 consecutive years and Ingredion has raised its dividend for 14 consecutive years. McCormick & Company, Incorporated is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| McCormick & Company, Incorporated | 23.12% | 13.29% | 5.87% |
| Ingredion | 9.36% | 15.86% | 8.66% |
Earnings & Valuation
This table compares McCormick & Company, Incorporated and Ingredion”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| McCormick & Company, Incorporated | $6.84 billion | 1.95 | $789.40 million | $6.10 | 8.15 |
| Ingredion | $7.22 billion | 0.90 | $729.00 million | $10.38 | 9.90 |
McCormick & Company, Incorporated has higher earnings, but lower revenue than Ingredion. McCormick & Company, Incorporated is trading at a lower price-to-earnings ratio than Ingredion, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
79.7% of McCormick & Company, Incorporated shares are owned by institutional investors. Comparatively, 85.3% of Ingredion shares are owned by institutional investors. 10.6% of McCormick & Company, Incorporated shares are owned by company insiders. Comparatively, 1.6% of Ingredion shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Analyst Recommendations
This is a breakdown of current ratings and target prices for McCormick & Company, Incorporated and Ingredion, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| McCormick & Company, Incorporated | 0 | 8 | 6 | 0 | 2.43 |
| Ingredion | 1 | 7 | 1 | 0 | 2.00 |
McCormick & Company, Incorporated presently has a consensus target price of $63.36, suggesting a potential upside of 27.44%. Ingredion has a consensus target price of $122.43, suggesting a potential upside of 19.16%. Given McCormick & Company, Incorporated’s stronger consensus rating and higher probable upside, equities analysts plainly believe McCormick & Company, Incorporated is more favorable than Ingredion.
Summary
McCormick & Company, Incorporated beats Ingredion on 11 of the 17 factors compared between the two stocks.
About McCormick & Company, Incorporated
McCormick & Co., Inc. engages in the manufacturing, marketing, and distribution of spices, seasoning mixes, condiments, and other flavorful products to retail outlets, food manufacturers, and foodservice businesses. It operates through the Consumer and Flavor Solutions segments. The Consumer segment sells spices, seasonings, condiments, and sauces. The Flavor Solutions segment includes seasoning blends, spices and herbs, condiments, coating systems, and compound flavors. The company was founded by Willoughby M. McCormick in 1889 and is headquartered in Baltimore, MD.
About Ingredion
Ingredion Incorporated, together with its subsidiaries, manufactures and sells sweeteners, starches, nutrition ingredients, and biomaterial solutions derived from wet milling and processing corn, and other starch-based materials to a range of industries in North America, South America, the Asia Pacific, Europe, the Middle East, and Africa. The company offers starch products for use in a range of processed foods; cornstarch; specialty paper starches for enhanced drainage, fiber retention, oil and grease resistance, improved printability, and biochemical oxygen demand control; starches and specialty starches for textile industry; industrial starches are used in the production of construction materials, textiles, adhesives, pharmaceuticals, and cosmetics, as well as in mining and water filtration; and specialty industrial starches for use in biomaterial applications, including biodegradable plastics, fabric softeners and detergents, hair and skin care applications, dusting powders for surgical gloves, and in the production of glass fiber and insulation. It also provides sweetener products comprising glucose syrups, high maltose syrup, high fructose corn syrup, dextrose, polyols, maltodextrin, glucose syrup solids, and non-genetically modified organism syrups for applications in food and beverage products, such as baked goods, snack foods, canned fruits, condiments, candy and other sweets, dairy products, ice cream, jams and jellies, prepared mixes, table syrups, and beverages. In addition, the company sells refined corn oil, corn gluten feed, and corn gluten meal; and other products, including fruit and vegetable products, such as concentrates, purees, and essences, as well as pulse proteins and hydrocolloids systems and blends. The company was formerly known as Corn Products International, Inc. and changed its name to Ingredion Incorporated in June 2012. Ingredion Incorporated was founded in 1906 and is headquartered in Westchester, Illinois.
Receive News & Ratings for McCormick & Company Incorporated Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for McCormick & Company Incorporated and related companies with MarketBeat.com's FREE daily email newsletter.
