McCormick & Company, (MKC) and Campbell Soup (CPB) Financial Contrast
McCormick & Company, (NYSE: MKC) and Campbell Soup (NYSE:CPB) are both large-cap consumer staples companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, earnings, profitability, institutional ownership, dividends and analyst recommendations.
Valuation and Earnings
This table compares McCormick & Company, and Campbell Soup’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|McCormick & Company,||$4.48 billion||2.49||$776.80 million||$3.77||26.12|
|Campbell Soup||$7.91 billion||1.83||$1.61 billion||$2.89||16.53|
Campbell Soup has higher revenue and earnings than McCormick & Company,. Campbell Soup is trading at a lower price-to-earnings ratio than McCormick & Company,, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings for McCormick & Company, and Campbell Soup, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|McCormick & Company,||0||5||4||0||2.44|
McCormick & Company, currently has a consensus price target of $102.75, indicating a potential upside of 4.36%. Campbell Soup has a consensus price target of $51.85, indicating a potential upside of 8.55%. Given Campbell Soup’s higher probable upside, analysts plainly believe Campbell Soup is more favorable than McCormick & Company,.
McCormick & Company, pays an annual dividend of $1.88 per share and has a dividend yield of 1.9%. Campbell Soup pays an annual dividend of $1.40 per share and has a dividend yield of 2.9%. McCormick & Company, pays out 49.9% of its earnings in the form of a dividend. Campbell Soup pays out 48.4% 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, has raised its dividend for 30 consecutive years. Campbell Soup is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares McCormick & Company, and Campbell Soup’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|McCormick & Company,||10.69%||28.28%||10.36%|
Insider & Institutional Ownership
72.9% of McCormick & Company, shares are owned by institutional investors. Comparatively, 44.3% of Campbell Soup shares are owned by institutional investors. 15.3% of McCormick & Company, shares are owned by insiders. Comparatively, 37.3% of Campbell Soup shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Volatility & Risk
McCormick & Company, has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500. Comparatively, Campbell Soup has a beta of 0.36, meaning that its stock price is 64% less volatile than the S&P 500.
Campbell Soup beats McCormick & Company, on 10 of the 17 factors compared between the two stocks.
McCormick & Company, Company Profile
McCormick & Company, Incorporated is engaged in manufacturing, marketing and distributing spices, seasoning mixes, condiments and other flavorful products to the food industry, including retailers, food manufacturers and foodservice businesses. The Company’s segments include consumer and industrial. The Company is involved in the manufacturing and sales of flavorful products. As of November 30, 2016, it offered brands for consumers in approximately 150 countries and territories. The Company’s brands in the Americas include McCormick, Lawry’s, and Club House, as well as brands, such as Gourmet Garden and OLD BAY. It provides a range of products to food manufacturers and foodservice customers. The Company’s sales, distribution and production facilities are located in North America, Europe and China. It markets regional and ethnic brands, such as Zatarain’s, Stubb’s, Thai Kitchen and Simply Asia. The Company offers sensory testing, culinary research, food safety and flavor application.
Campbell Soup Company Profile
Campbell Soup Company is a food company, which manufactures and markets food products. The Company’s segments include Americas Simple Meals and Beverages; Global Biscuits and Snacks, and Campbell Fresh. The Americas Simple Meals and Beverages segment includes the retail and food service channel businesses. The segment includes the products, such as Campbell’s condensed and ready-to-serve soups; Swanson broth and stocks; Prego pasta sauces; Pace Mexican sauces; Campbell’s gravies, pasta, beans and dinner sauces; Plum food and snacks; V8 juices and beverages, and Campbell’s tomato juice. The Global Biscuits and Snacks segment includes Pepperidge Farm cookies, crackers, bakery and frozen products; Arnott’s biscuits, and Kelsen cookies. The Campbell Fresh segment includes Bolthouse Farms fresh carrots, carrot ingredients, refrigerated beverages and refrigerated salad dressings; Garden Fresh Gourmet salsa, hummus, dips and tortilla chips, and the United States refrigerated soup business.
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