Reviewing MGP Ingredients (MGPI) and Mondelez International (MDLZ)

MGP Ingredients (NASDAQ: MGPI) and Mondelez International (NASDAQ:MDLZ) are both consumer staples companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, profitability, earnings, dividends, analyst recommendations and valuation.

Profitability

This table compares MGP Ingredients and Mondelez International’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%
Mondelez International 6.92% 11.96% 5.00%

Analyst Ratings

This is a breakdown of current ratings for MGP Ingredients and Mondelez International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MGP Ingredients 0 1 1 0 2.50
Mondelez International 0 2 8 1 2.91

MGP Ingredients currently has a consensus price target of $66.00, suggesting a potential upside of 1.99%. Mondelez International has a consensus price target of $50.73, suggesting a potential upside of 24.00%. Given Mondelez International’s stronger consensus rating and higher possible upside, analysts clearly believe Mondelez International is more favorable than MGP Ingredients.

Dividends

MGP Ingredients pays an annual dividend of $0.16 per share and has a dividend yield of 0.2%. Mondelez International pays an annual dividend of $0.88 per share and has a dividend yield of 2.2%. MGP Ingredients pays out 8.4% of its earnings in the form of a dividend. Mondelez International pays out 77.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider & Institutional Ownership

98.5% of MGP Ingredients shares are owned by institutional investors. Comparatively, 75.4% of Mondelez International shares are owned by institutional investors. 23.5% of MGP Ingredients shares are owned by company insiders. Comparatively, 3.6% of Mondelez International 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.

Risk & Volatility

MGP Ingredients has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500. Comparatively, Mondelez International has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500.

Valuation & Earnings

This table compares MGP Ingredients and Mondelez International’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
MGP Ingredients $333.96 million 3.24 $51.47 million $1.90 34.06
Mondelez International $25.57 billion 2.41 $4.37 billion $1.14 35.89

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

Summary

MGP Ingredients beats Mondelez International on 9 of the 17 factors compared between the two stocks.

MGP Ingredients Company Profile

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.

Mondelez International Company Profile

Mondelez International, Inc. is a snack company. The Company manufactures and markets snack food and beverage products for consumers. It operates through four segments: Latin America, Asia, Middle East, and Africa (AMEA), Europe and North America. As of December 31, 2016, its brands spanned five product categories: Biscuits (including cookies, crackers and salted snacks); Chocolate; Gum and candy; Beverages (including coffee and powdered beverages), and Cheese and grocery. Itsportfolio includes various snack brands, including Nabisco, Oreo, LU and belVita biscuits; Cadbury, Milka, Cadbury Dairy Milk and Toblerone chocolate; Trident gum; Halls candy, and Tang powdered beverages. The Company sells its products to supermarket chains, wholesalers, supercenters, club stores, mass merchandisers, distributors, convenience stores, gasoline stations, drug stores, value stores and retail food outlets. As of December 31, 2016, it sold its products to consumers in approximately 165 countries.

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