MGP Ingredients (NASDAQ: MGPI) and The Kraft Heinz (NASDAQ:KHC) are both consumer staples companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, profitabiliy, earnings, dividends and institutional ownership.

Earnings and Valuation

This table compares MGP Ingredients and The Kraft Heinz’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
MGP Ingredients $328.60 million 2.97 $49.94 million $1.90 30.72
The Kraft Heinz $26.28 billion 4.03 $8.40 billion $3.13 27.80

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

Risk and Volatility

MGP Ingredients has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500. Comparatively, The Kraft Heinz has a beta of 0.44, meaning that its stock price is 56% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for MGP Ingredients and The Kraft Heinz, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MGP Ingredients 0 1 1 0 2.50
The Kraft Heinz 0 4 11 0 2.73

MGP Ingredients currently has a consensus target price of $66.00, suggesting a potential upside of 13.09%. The Kraft Heinz has a consensus target price of $98.08, suggesting a potential upside of 12.71%. Given MGP Ingredients’ higher possible upside, equities research analysts clearly believe MGP Ingredients is more favorable than The Kraft Heinz.

Insider and Institutional Ownership

97.7% of MGP Ingredients shares are held by institutional investors. Comparatively, 62.0% of The Kraft Heinz shares are held by institutional investors. 23.5% of MGP Ingredients shares are held by company insiders. Comparatively, 26.9% of The Kraft Heinz shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
MGP Ingredients 9.33% 21.30% 13.83%
The Kraft Heinz 14.67% 7.52% 3.62%

Dividends

MGP Ingredients pays an annual dividend of $0.16 per share and has a dividend yield of 0.3%. The Kraft Heinz pays an annual dividend of $2.40 per share and has a dividend yield of 2.8%. MGP Ingredients pays out 8.4% of its earnings in the form of a dividend. The Kraft Heinz pays out 76.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

The Kraft Heinz beats MGP Ingredients on 9 of the 16 factors compared between the two stocks.

About MGP Ingredients

MGP Ingredients, Inc. is a producer and supplier of distilled spirits, and specialty wheat protein and starch food ingredients. The Company’s distilled spirits include bourbon and rye whiskeys, and grain neutral spirits, including vodka and gin. The Company’s segments include distillery products and ingredient solutions. The distillery products segment consists of food grade alcohol and distillery co-products, such as distillers feed and fuel grade alcohol. The ingredient solutions segment consists of specialty starches and proteins, commodity starches and commodity proteins. The distillery products segment also includes warehouse services, including barrel put away, barrel storage, and barrel retrieval services. It is also a producer of industrial alcohol for use in both food and non-food applications. The Company’s distillery products are derived from corn and other grains (including rye, barley, wheat, barley malt and milo), and its ingredient products are derived from wheat flour.

About The Kraft Heinz

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.

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