MGP Ingredients (NASDAQ: MGPI) and Penford (NASDAQ:PENX) are both small-cap food processing – nec 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.
This table compares MGP Ingredients and Penford’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
MGP Ingredients pays an annual dividend of $0.16 per share and has a dividend yield of 0.2%. Penford does not pay a dividend. MGP Ingredients pays out 7.3% of its earnings in the form of a dividend.
This is a summary of recent recommendations and price targets for MGP Ingredients and Penford, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
MGP Ingredients presently has a consensus price target of $80.00, indicating a potential downside of 2.77%. Given MGP Ingredients’ higher possible upside, equities analysts clearly believe MGP Ingredients is more favorable than Penford.
Institutional and Insider Ownership
99.9% of MGP Ingredients shares are held by institutional investors. 23.5% of MGP 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.
Volatility & Risk
MGP Ingredients has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500. Comparatively, Penford has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500.
Earnings and Valuation
This table compares MGP Ingredients and Penford’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|MGP Ingredients||$328.08 million||4.20||$31.18 million||$2.18||37.74|
MGP Ingredients has higher revenue and earnings than Penford. Penford is trading at a lower price-to-earnings ratio than MGP Ingredients, indicating that it is currently the more affordable of the two stocks.
MGP Ingredients beats Penford on 12 of the 13 factors compared between the two stocks.
About MGP Ingredients
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.
Penford Corporation (Penford) is a developer, manufacturer and marketer of natural-based ingredient systems for food and industrial applications, including fuel grade ethanol. The Company has research and development capabilities, which are used in understanding the complex chemistry of carbohydrate-based materials and in developing applications to address customer needs. Penford operates in two business segments: Industrial Ingredients and Food Ingredients. Industrial Ingredients segment is a supplier of chemically modified starches to the paper and packaging industries. Industrial Ingredients also produces food grade corn starch for sale by the Company’s Food Ingredients business. Food Ingredients segment is a developer and manufacturer of specialty starches and dextrins to the food manufacturing and food service industries. This business is engaged is in leveraging the inherent characteristics from potato, corn, tapioca and rice to help improve its customers’ product performance.
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