Reviewing McCormick & Company, (MKC) & Darling Ingredients (DAR)
McCormick & Company, (NYSE: MKC) and Darling Ingredients (NYSE:DAR) are both mid-cap non-cyclical consumer goods & services companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, risk, profitability and earnings.
Risk & Volatility
McCormick & Company, has a beta of 0.53, meaning that its share price is 47% less volatile than the S&P 500. Comparatively, Darling Ingredients has a beta of 1.54, meaning that its share price is 54% more volatile than the S&P 500.
This table compares McCormick & Company, and Darling Ingredients’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|McCormick & Company,||$4.41 billion||2.94||$472.30 million||$3.61||27.43|
|Darling Ingredients||$3.40 billion||0.82||$102.31 million||$0.39||43.59|
McCormick & Company, has higher revenue and earnings than Darling Ingredients. McCormick & Company, is trading at a lower price-to-earnings ratio than Darling Ingredients, indicating that it is currently the more affordable of the two stocks.
McCormick & Company, pays an annual dividend of $1.88 per share and has a dividend yield of 1.9%. Darling Ingredients does not pay a dividend. McCormick & Company, pays out 52.1% of its earnings in the form of a dividend. Darling Ingredients has raised its dividend for 30 consecutive years.
This table compares McCormick & Company, and Darling Ingredients’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|McCormick & Company,||10.05%||26.09%||8.17%|
Insider and Institutional Ownership
71.2% of McCormick & Company, shares are held by institutional investors. Comparatively, 98.5% of Darling Ingredients shares are held by institutional investors. 15.3% of McCormick & Company, shares are held by insiders. Comparatively, 2.0% of Darling Ingredients shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This is a summary of recent ratings and target prices for McCormick & Company, and Darling Ingredients, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|McCormick & Company,||0||6||4||0||2.40|
McCormick & Company, presently has a consensus target price of $105.11, suggesting a potential upside of 6.16%. Darling Ingredients has a consensus target price of $19.40, suggesting a potential upside of 14.12%. Given Darling Ingredients’ stronger consensus rating and higher probable upside, analysts clearly believe Darling Ingredients is more favorable than McCormick & Company,.
McCormick & Company, beats Darling Ingredients on 9 of the 16 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.
Darling Ingredients Company Profile
Darling Ingredients Inc. (Darling) is a developer and producer of sustainable natural ingredients from edible and inedible bio-nutrients, creating a range of ingredients and customized specialty solutions for customers in the pharmaceutical, food, pet food, feed, industrial, fuel, bioenergy and fertilizer industries. The Company operates through three segments: Feed Ingredients, Food Ingredients and Fuel Ingredients. The Company collects and transforms all aspects of animal by-product streams into useable and specialty ingredients, such as gelatin, edible fats, feed-grade fats, animal proteins and meals, plasma, pet food ingredients, organic fertilizers, yellow grease, fuel feedstocks, green energy, natural casings and hides. In addition, the Company provides grease trap services to food service establishments, environmental services to food processors and sells restaurant cooking oil delivery and collection equipment.
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