Critical Analysis: Darling Ingredients (NYSE:DAR) versus BellRing Brands (NYSE:BRBR)

BellRing Brands (NYSE:BRBR) and Darling Ingredients (NYSE:DAR) are both mid-cap consumer staples companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, valuation, risk, institutional ownership, earnings, analyst recommendations and dividends.

Institutional & Insider Ownership

95.0% of BellRing Brands shares are owned by institutional investors. Comparatively, 94.4% of Darling Ingredients shares are owned by institutional investors. 1.5% of BellRing Brands shares are owned by insiders. Comparatively, 2.1% of Darling Ingredients shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for BellRing Brands and Darling Ingredients, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BellRing Brands	2	5	12	0	2.53
Darling Ingredients	1	1	9	1	2.83

BellRing Brands presently has a consensus target price of $38.88, suggesting a potential upside of 117.77%. Darling Ingredients has a consensus target price of $55.00, suggesting a potential upside of 7.92%. Given BellRing Brands’ higher probable upside, research analysts clearly believe BellRing Brands is more favorable than Darling Ingredients.

Profitability

This table compares BellRing Brands and Darling Ingredients’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BellRing Brands	7.88%	-64.79%	25.12%
Darling Ingredients	1.02%	2.44%	1.23%

Volatility & Risk

BellRing Brands has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500. Comparatively, Darling Ingredients has a beta of 1.27, meaning that its share price is 27% more volatile than the S&P 500.

Earnings and Valuation

This table compares BellRing Brands and Darling Ingredients”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BellRing Brands	$2.32 billion	0.90	$216.20 million	$1.45	12.31
Darling Ingredients	$6.14 billion	1.31	$62.80 million	$0.39	130.67

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

Summary

Darling Ingredients beats BellRing Brands on 8 of the 15 factors compared between the two stocks.

About BellRing Brands

BellRing Brands, Inc., together with its subsidiaries, provides various nutrition products in the United States. The company offers ready-to-drink (RTD) protein shakes, other RTD beverages, powders, nutrition bars, and other products primarily under the Premier Protein and Dymatize brands. It distributes its products through club, food, drug, mass, eCommerce, specialty, and convenience channels. BellRing Brands, Inc. was incorporated in 2019 and is headquartered in Saint Louis, Missouri.

About Darling Ingredients

Darling Ingredients Inc. develops, produces, and sells natural ingredients from edible and inedible bio-nutrients in North America, Europe, China, South America, and internationally. The company operates through three segments: Feed Ingredients, Food Ingredients, and Fuel Ingredients. It offers ingredients and customized specialty solutions for customers in the pharmaceutical, food, pet food, feed, industrial, fuel, bioenergy, and fertilizer industries. The company also collects and transforms various animal by-product streams into useable and specialty ingredients, such as collagen, edible fats, feed-grade fats, animal proteins and meals, plasma, pet food ingredients, organic fertilizers, yellow grease, fuel feedstock, green energy, natural casings, and hides. In addition, it recovers and converts used cooking oil and animal fats, and residual bakery products into valuable feed and fuel ingredients. Further, the company provides environmental services, including grease trap collection and disposal services to food service establishments. It primarily operates under the Rendac, Sonac, FASA, Ecoson, Rousselot, Gelnex, and CTH brand names. The company was formerly known as Darling International Inc. and changed its name to Darling Ingredients Inc. in May 2014. Darling Ingredients Inc. was founded in 1882 and is headquartered in Irving, Texas.