Ralcorp (NYSE: RAH) and Kellogg (NYSE:K) are both non-cyclical consumer goods & services companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, risk, earnings, profitability, valuation, analyst recommendations and institutional ownership.

Valuation & Earnings

This table compares Ralcorp and Kellogg’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ralcorp N/A N/A N/A $1.03 N/A
Kellogg $13.01 billion 1.80 $694.00 million $2.24 30.34

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

Dividends

Kellogg pays an annual dividend of $2.16 per share and has a dividend yield of 3.2%. Ralcorp does not pay a dividend. Kellogg pays out 96.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kellogg has raised its dividend for 12 consecutive years.

Profitability

This table compares Ralcorp and Kellogg’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ralcorp N/A N/A N/A
Kellogg 6.15% 73.92% 9.27%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Ralcorp and Kellogg, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ralcorp 0 0 0 0 N/A
Kellogg 2 7 3 0 2.08

Kellogg has a consensus target price of $71.50, suggesting a potential upside of 5.19%.

Institutional & Insider Ownership

89.7% of Kellogg shares are owned by institutional investors. 1.3% of Kellogg shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Kellogg beats Ralcorp on 10 of the 11 factors compared between the two stocks.

Ralcorp Company Profile

Ralcorp Holdings, Inc. (Ralcorp) is engaged in manufacturing, distributing and marketing private-brand food products and other regional and value-brand food products in the grocery, mass merchandise, drugstore and foodservice channels. The Company’s products include nutritional bars; snack mixes, corn-based chips and extruded corn snack products; crackers and cookies; snack nuts; chocolate candy; salad dressings; mayonnaise; peanut butter; jams and jellies; syrups; sauces; frozen griddle products, including pancakes, waffles and French toast; frozen biscuits and other frozen pre-baked products, such as breads and rolls; frozen and refrigerated doughs, and dry pasta. In May 2012, the Company acquired Petri Baking Products, Inc. In June 2012, the Company acquired Gelit S.r.l., a producer of frozen ready meals in Italy. In January 2013, ConAgra Foods Inc acquired the Company.

Kellogg Company Profile

Kellogg Company is a manufacturer and marketer of ready-to-eat cereal and convenience foods. The Company’s principal products are ready-to-eat cereals and convenience foods, such as cookies, crackers, savory snacks, toaster pastries, cereal bars, fruit-flavored snacks, frozen waffles and veggie foods. Its segments include U.S. Morning Foods, which includes cereal, toaster pastries, health and wellness bars, and beverages; U.S. Snacks, which includes cookies, crackers, cereal bars, savory snacks and fruit-flavored snacks; U.S. Specialty, which represents food away from home channels, including food service, convenience, vending, Girl Scouts and food manufacturing; North America Other, which includes the U.S. Frozen, Kashi and Canada operating segments; Europe, which consists of European countries; Latin America, which consists of Central and South America and includes Mexico, and Asia Pacific, which consists of Sub-Saharan Africa, Australia and other Asian and Pacific markets.

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