Darling Ingredients (NYSE:DAR) and Associated British Foods (OTCMKTS:ASBFY) Critical Review

Associated British Foods (OTCMKTS:ASBFY) and Darling Ingredients (NYSE:DAR) are both large-cap consumer staples companies, but which is the better business? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, earnings, valuation, dividends and profitability.

Insider and Institutional Ownership

94.4% of Darling Ingredients shares are held by institutional investors. 1.9% of Darling Ingredients shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Associated British Foods has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500. Comparatively, Darling Ingredients has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500.

Profitability

This table compares Associated British Foods and Darling Ingredients’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Associated British Foods	N/A	N/A	N/A
Darling Ingredients	3.54%	5.76%	2.96%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Associated British Foods and Darling Ingredients, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Associated British Foods	4	1	0	1	1.67
Darling Ingredients	1	0	10	2	3.00

Darling Ingredients has a consensus target price of $68.00, indicating a potential upside of 7.44%. Given Darling Ingredients’ stronger consensus rating and higher probable upside, analysts plainly believe Darling Ingredients is more favorable than Associated British Foods.

Valuation & Earnings

This table compares Associated British Foods and Darling Ingredients”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Associated British Foods	$25.41 billion	0.70	$1.34 billion	N/A	N/A
Darling Ingredients	$6.31 billion	1.59	$62.80 million	$1.38	45.86

Associated British Foods has higher revenue and earnings than Darling Ingredients.

Summary

Darling Ingredients beats Associated British Foods on 11 of the 13 factors compared between the two stocks.

About Associated British Foods

Associated British Foods plc operates as a diversified food, ingredients, and retail company worldwide. It operates through five segments: Grocery, Ingredients, Agriculture, Sugar, and Retail. The Grocery segment manufactures and sells grocery products, including hot beverages, sugar and sweeteners, vegetable oils, balsamic vinegars, bread and baked goods, cereals, ethnic foods, and meat products to retail, wholesale, and foodservice businesses. The Ingredients segment manufactures bakers' yeast, bakery ingredients, enzymes, lipids, yeast extracts, and cereal specialties. The Agriculture segment manufactures and sells animal feeds; and provides other products and services for the agriculture sector. The Sugar segment is involved in growing, processing, and selling sugar beet and sugar cane to industrial users. The Retail segment is involved in buying and merchandising clothing and accessories through the Primark and Penneys retail chains, which offer women's, men's, and kids wear, as well as beauty, homeware, and accessories. The company was incorporated in 1934 and is headquartered in London, the United Kingdom. Associated British Foods plc operates as a subsidiary of Wittington Investments Limited.

About Darling Ingredients

Darling Ingredients Inc. develops, produces, and sells natural ingredients from edible and inedible bio-nutrients in North America, Europe, China, South America, and internationally. The company operates through three segments: Feed Ingredients, Food Ingredients, and Fuel Ingredients. It offers ingredients and customized specialty solutions for customers in the pharmaceutical, food, pet food, feed, industrial, fuel, bioenergy, and fertilizer industries. The company also collects and transforms various animal by-product streams into useable and specialty ingredients, such as collagen, edible fats, feed-grade fats, animal proteins and meals, plasma, pet food ingredients, organic fertilizers, yellow grease, fuel feedstock, green energy, natural casings, and hides. In addition, it recovers and converts used cooking oil and animal fats, and residual bakery products into valuable feed and fuel ingredients. Further, the company provides environmental services, including grease trap collection and disposal services to food service establishments. It primarily operates under the Rendac, Sonac, FASA, Ecoson, Rousselot, Gelnex, and CTH brand names. The company was formerly known as Darling International Inc. and changed its name to Darling Ingredients Inc. in May 2014. Darling Ingredients Inc. was founded in 1882 and is headquartered in Irving, Texas.