Nomad Foods (NYSE:NOMD) and Ajinomoto (OTCMKTS:AJINY) Head to Head Analysis

Ajinomoto (OTCMKTS:AJINY) and Nomad Foods (NYSE:NOMD) are both consumer staples companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, dividends, earnings, institutional ownership and analyst recommendations.

Insider & Institutional Ownership

75.3% of Nomad Foods shares are held by institutional investors. 17.3% of Nomad Foods shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Ajinomoto and Nomad Foods”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ajinomoto	$10.05 billion	2.72	$463.80 million	$0.83	33.69
Nomad Foods	$3.43 billion	0.46	$154.66 million	$1.03	10.94

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

Dividends

Ajinomoto pays an annual dividend of $0.18 per share and has a dividend yield of 0.6%. Nomad Foods pays an annual dividend of $0.68 per share and has a dividend yield of 6.0%. Ajinomoto pays out 21.7% of its earnings in the form of a dividend. Nomad Foods pays out 66.0% 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. Nomad Foods has increased its dividend for 2 consecutive years. Nomad Foods is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current ratings for Ajinomoto and Nomad Foods, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ajinomoto	0	1	0	0	2.00
Nomad Foods	1	2	3	0	2.33

Nomad Foods has a consensus target price of $12.50, suggesting a potential upside of 10.96%. Given Nomad Foods’ stronger consensus rating and higher possible upside, analysts plainly believe Nomad Foods is more favorable than Ajinomoto.

Profitability

This table compares Ajinomoto and Nomad Foods’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ajinomoto	N/A	N/A	N/A
Nomad Foods	4.43%	9.05%	3.61%

Risk & Volatility

Ajinomoto has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500. Comparatively, Nomad Foods has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500.

Summary

Nomad Foods beats Ajinomoto on 12 of the 17 factors compared between the two stocks.

About Ajinomoto

Ajinomoto Co., Inc. engages in the seasonings and foods, frozen foods, and healthcare and other businesses in Japan and internationally. The Seasonings and Foods segment offers sauces and seasoning products under the AJI-NO-MOTO, HON-DASHI, Cook Do, Ajinomoto KK Consommé, Pure Select Mayonnaise, Ros Dee, Masako, Aji-ngon, Sazón, Sajiku, and CRISPY FRY names; and solutions and ingredients for foodservice and processed food manufacturers, processed foods, and restaurants, as well as industrial, retail, and other applications. This segment also provides instant noodles under the Knorr Cup Soup and YumYum names; coffee beverages under the Birdy and Blendy brands; powdered drink under the Birdy 3in1 name; MAXIM brand products; Chyotto Zeitakuna Kohiten brand products; and gift sets and office supplies comprising coffee vending machines, tea servers, etc. The Frozen Foods segment offers Chinese dumplings, cooked rice, noodles, desserts, shumai, processed chicken, and other products under the AJINOMOTO FRESH FROZEN, Bernardi, FRED’S, Golden Tiger, José Olé, LingLing, POSADA, and TAI PEI brands. The Healthcare and Other segment provides amino acids for applications in various industries, such as pharmaceuticals and foods; contract development and manufacturing services for pharmaceutical intermediates and active ingredients, aseptic fill finish services, etc.; personal care ingredients; and medical foods, crop services, etc. This segment also offers Ajinomoto Build-up Film, an interlayer insulating material for semiconductor packages; fundamental foods under the Glyna and Amino Aile names; sports nutrition supplements under the amino VITAL brand; and functional materials, such as activated carbon, release paper, etc. Ajinomoto Co., Inc. was founded in 1909 and is headquartered in Tokyo, Japan.

About Nomad Foods

Nomad Foods Limited, together with its subsidiaries, manufactures, markets, and distributes a range of frozen food products in the United Kingdom and internationally. The company offers frozen fish products, including fish fingers, coated fish, and natural fish; ready-to-cook vegetable products, such as peas and spinach; and frozen poultry and meat products comprising nuggets, grills, and burgers. It also provides meal products that include ready-to-cook noodles, pasta, lasagna, pancakes, and other ready-made meals; ice creams, such as in-home and out-of-home ice creams; and other products consisting of soups, pizzas, bakery goods, and meat substitutes. The company sells its products to supermarkets and food retail chains primarily under the Birds Eye, Green Cuisine, iglo, Findus, Aunt Bessie's, Goodfella's, Frikom, Ledo, La Cocinera, and Belviva brand names. Nomad Foods Limited was founded in 2014 and is headquartered in Feltham, the United Kingdom.