Head-To-Head Analysis: Constellation Brands (NYSE:STZ) & MGP Ingredients (NASDAQ:MGPI)

Constellation Brands (NYSE:STZ) and MGP Ingredients (NASDAQ:MGPI) are both consumer staples companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, profitability, valuation, analyst recommendations, institutional ownership and risk.

Profitability

This table compares Constellation Brands and MGP Ingredients’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Constellation Brands	11.08%	29.15%	10.20%
MGP Ingredients	-2.56%	9.65%	5.83%

Institutional and Insider Ownership

77.3% of Constellation Brands shares are owned by institutional investors. Comparatively, 77.1% of MGP Ingredients shares are owned by institutional investors. 12.5% of Constellation Brands shares are owned by company insiders. Comparatively, 34.4% of MGP Ingredients shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Constellation Brands and MGP Ingredients”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Constellation Brands	$10.96 billion	2.48	-$81.40 million	$6.34	24.67
MGP Ingredients	$578.86 million	0.95	$34.66 million	($0.67)	-38.70

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

Risk and Volatility

Constellation Brands has a beta of 0.44, suggesting that its share price is 56% less volatile than the S&P 500. Comparatively, MGP Ingredients has a beta of 0.42, suggesting that its share price is 58% less volatile than the S&P 500.

Dividends

Constellation Brands pays an annual dividend of $4.08 per share and has a dividend yield of 2.6%. MGP Ingredients pays an annual dividend of $0.48 per share and has a dividend yield of 1.9%. Constellation Brands pays out 64.4% of its earnings in the form of a dividend. MGP Ingredients pays out -71.6% 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. Constellation Brands has increased its dividend for 5 consecutive years. Constellation Brands is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Constellation Brands and MGP Ingredients, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Constellation Brands	2	9	11	1	2.48
MGP Ingredients	2	1	4	0	2.29

Constellation Brands currently has a consensus target price of $176.91, suggesting a potential upside of 13.09%. MGP Ingredients has a consensus target price of $33.60, suggesting a potential upside of 29.58%. Given MGP Ingredients’ higher possible upside, analysts plainly believe MGP Ingredients is more favorable than Constellation Brands.

Summary

Constellation Brands beats MGP Ingredients on 14 of the 18 factors compared between the two stocks.

About Constellation Brands

Constellation Brands, Inc., together with its subsidiaries, produces, imports, markets, and sells beer, wine, and spirits in the United States, Canada, Mexico, New Zealand, and Italy. The company provides beer primarily under the Corona Extra, Corona Familiar, Corona Hard Seltzer, Corona Light, Corona Non-Alcoholic, Corona Premier, Corona Refresca, Modelo Especial, Modelo Chelada, Modelo Negra, Modelo Oro, Victoria, Vicky Chamoy, and Pacifico brands. It also offers wine under the Cook’s California Champagne, Kim Crawford, Meiomi, Mount Veeder, Ruffino, SIMI, My Favorite Neighbor, Robert Mondavi Winery, Schrader, and The Prisoner Wine Company brands; and spirits under the Casa Noble, Copper & Kings, High West, Mi CAMPO, Nelson’s Green Brier, and SVEDKA brands. The company provides its products to wholesale distributors, retailers, on-premise locations, and state alcohol beverage control agencies. Constellation Brands, Inc. was founded in 1945 and is headquartered in Victor, New York.

About MGP Ingredients

MGP Ingredients, Inc., together with its subsidiaries, engages in the production and supply of distilled spirits, branded spirits, and food ingredients in the United States and internationally. The company operates through three segments: Distillery Solutions; Branded Spirits; and Ingredient Solutions. The Distillery Solutions segment provides food grade alcohol for beverage applications that include bourbon, rye, whiskeys, as well as grain neutral spirits, include vodka and gin; and food-grade industrial alcohol, which is used as an ingredient in food products, personal care products, cleaning solutions, pharmaceuticals, and various other products. This segment also offers distillery co-products, such as dried distillers’ grain, fuel-grade alcohol for blending with gasoline, and corn oil; and provides warehouse services, including barrel put away, barrel storage, and barrel retrieval services, as well as blending services. The Branded Spirits segment provides premium plus, ultra-premium, super premium, premium, mid, and value branded distilled spirits, as well as private label products. The Ingredient Solutions segment provides specialty wheat starches for food applications under the Fibersym, Resistant Starch series, and FiberRite RW Resistant Starch names; specialty wheat proteins for food applications under the Arise and Proterra names; gluten-free textured pea proteins; commodity wheat starch for food and non-food applications; and commodity wheat proteins. It sells its products directly or through distributors to manufacturers and processors of finished packaged goods or to bakeries. The company was founded in 1941 and is based in Atchison, Kansas.