Analyzing J. M. Smucker (NYSE:SJM) & Marzetti (NASDAQ:MZTI)

Marzetti (NASDAQ:MZTI) and J. M. Smucker (NYSE:SJM) are both consumer staples companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, earnings, profitability, valuation and institutional ownership.

Institutional and Insider Ownership

66.4% of Marzetti shares are owned by institutional investors. Comparatively, 81.7% of J. M. Smucker shares are owned by institutional investors. 29.1% of Marzetti shares are owned by insiders. Comparatively, 2.8% of J. M. Smucker shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Marzetti and J. M. Smucker, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Marzetti	1	2	0	0	1.67
J. M. Smucker	0	8	10	0	2.56

Marzetti currently has a consensus price target of $135.00, suggesting a potential upside of 20.72%. J. M. Smucker has a consensus price target of $136.25, suggesting a potential upside of 3.71%. Given Marzetti’s higher possible upside, research analysts clearly believe Marzetti is more favorable than J. M. Smucker.

Profitability

This table compares Marzetti and J. M. Smucker’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Marzetti	9.93%	18.22%	13.43%
J. M. Smucker	2.51%	19.85%	6.76%

Valuation and Earnings

This table compares Marzetti and J. M. Smucker”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Marzetti	$1.93 billion	1.58	$191.61 million	$6.97	16.04
J. M. Smucker	$9.05 billion	1.55	-$138.70 million	$2.14	61.39

Marzetti has higher earnings, but lower revenue than J. M. Smucker. Marzetti is trading at a lower price-to-earnings ratio than J. M. Smucker, indicating that it is currently the more affordable of the two stocks.

Dividends

Marzetti pays an annual dividend of $4.00 per share and has a dividend yield of 3.6%. J. M. Smucker pays an annual dividend of $4.48 per share and has a dividend yield of 3.4%. Marzetti pays out 57.4% of its earnings in the form of a dividend. J. M. Smucker pays out 209.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Marzetti has increased its dividend for 62 consecutive years and J. M. Smucker has increased its dividend for 27 consecutive years. Marzetti is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Marzetti has a beta of 0.32, meaning that its share price is 68% less volatile than the S&P 500. Comparatively, J. M. Smucker has a beta of 0.25, meaning that its share price is 75% less volatile than the S&P 500.

Summary

Marzetti beats J. M. Smucker on 11 of the 17 factors compared between the two stocks.

About Marzetti

Lancaster Colony Corporation engages in the manufacturing and marketing of specialty food products for the retail and foodservice channels in the United States. It operates in two segments, Retail and Foodservice. The company offers frozen garlic bread under the New York BRAND Bakery; frozen Parkerhouse style yeast and dinner rolls under the Sister Schubert's brand; salad dressings under the Marzetti, Simply Dressed, Cardini's, and Girard's brands; vegetable and fruit dips under the Marzetti brand; croutons and salad toppings under the New York BRAND Bakery, Chatham Village, and Marzetti brands; and frozen pasta under the Marzetti Frozen Pasta brand. It also manufactures and sells other products to brand license agreements, including Olive Garden dressings, Buffalo Wild Wings sauces, and Chick-fil-A sauces. The company sells its products through sales personnel, food brokers, and distributors to retailers and restaurants. Lancaster Colony Corporation was incorporated in 1961 and is based in Westerville, Ohio.

About J. M. Smucker

The J. M. Smucker Company manufactures and markets branded food and beverage products worldwide. It operates in three segments: U.S. Retail Pet Foods, U.S. Retail Coffee, and U.S. Retail Consumer Foods. The company offers mainstream roast, ground, single serve, and premium coffee; peanut butter and specialty spreads; fruit spreads, toppings, and syrups; jelly products; nut mix products; shortening and oils; frozen sandwiches and snacks; pet food and pet snacks; and foodservice hot beverage, foodservice portion control, and flour products, as well as dog and cat food, frozen handheld products, juices and beverages, and baking mixes and ingredients. It provides its products under the Meow Mix, Milk-Bone, Pup-Peroni, Canine Carry Outs, Folgers, Café Bustelo, Dunkin', Folgers, Café Bustelo, 1850, Jif, Smucker's, Smucker's Uncrustables, Robin Hood, and Five Roses. The company sells its products through direct sales and brokers to food retailers, club stores, discount and dollar stores, online retailers, pet specialty stores, natural foods stores and distributors, drug stores, military commissaries, and mass merchandisers. Smucker Company was founded in 1897 and is headquartered in Orrville, Ohio.