Reviewing B&G Foods (BGS) and Darling Ingredients (DAR)

B&G Foods (NYSE: BGS) 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 dividends, risk, institutional ownership, earnings, analyst recommendations, profitability and valuation.

Earnings and Valuation

This table compares B&G Foods and Darling Ingredients’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
B&G Foods $1.39 billion 1.68 $109.42 million $1.52 23.19
Darling Ingredients $3.40 billion 0.89 $102.31 million $0.38 48.18

B&G Foods has higher earnings, but lower revenue than Darling Ingredients. B&G Foods is trading at a lower price-to-earnings ratio than Darling Ingredients, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares B&G Foods and Darling Ingredients’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
B&G Foods 6.29% 15.50% 3.92%
Darling Ingredients 1.76% 2.96% 1.32%

Volatility & Risk

B&G Foods has a beta of 0.18, suggesting that its stock price is 82% less volatile than the S&P 500. Comparatively, Darling Ingredients has a beta of 1.52, suggesting that its stock price is 52% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for B&G Foods and Darling Ingredients, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
B&G Foods 0 2 6 0 2.75
Darling Ingredients 0 1 4 0 2.80

B&G Foods presently has a consensus price target of $40.75, indicating a potential upside of 15.60%. Darling Ingredients has a consensus price target of $19.40, indicating a potential upside of 5.95%. Given B&G Foods’ higher possible upside, equities analysts clearly believe B&G Foods is more favorable than Darling Ingredients.

Institutional and Insider Ownership

93.9% of B&G Foods shares are held by institutional investors. Comparatively, 97.8% of Darling Ingredients shares are held by institutional investors. 2.1% of B&G Foods shares are held by company insiders. Comparatively, 2.0% of Darling Ingredients shares are held 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.

Dividends

B&G Foods pays an annual dividend of $1.86 per share and has a dividend yield of 5.3%. Darling Ingredients does not pay a dividend. B&G Foods pays out 122.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. B&G Foods has raised its dividend for 6 consecutive years.

Summary

B&G Foods beats Darling Ingredients on 11 of the 17 factors compared between the two stocks.

About B&G Foods

B&G Foods, Inc. (B&G Foods) is a holding company. The Company manufactures, sells and distributes a portfolio of shelf-stable and frozen foods across the United States, Canada and Puerto Rico. Its products include frozen and canned vegetables, hot cereals, fruit spreads, canned meats and beans, bagel chips, spices, seasonings, hot sauces, wine vinegar, maple syrup, molasses, salad dressings, pizza crusts, Mexican-style sauces, dry soups, taco shells and kits, salsas, pickles, peppers, tomato-based products, puffed corn and rice snacks, nut clusters and other specialty products. Its products are marketed under various brands, including Ac’cent, B&G, B&M, Baker’s Joy, Bear Creek Country Kitchens, Brer Rabbit, Canoleo, Cary’s, Cream of Rice, Cream of Wheat, Devonsheer, Don Pepino, Durkee, New York Style, Old London, Original Tings, Ortega, Spice Islands, Spring Tree, Static Guard, Sugar Twin, Tone’s, Trappey’s, TrueNorth, Underwood, Vermont Maid, Victoria, Weber and Wright’s.

About Darling Ingredients

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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