Financial Analysis: Ingredion (NYSE:INGR) & J. M. Smucker (NYSE:SJM)

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

Insider and Institutional Ownership

85.3% of Ingredion shares are owned by institutional investors. Comparatively, 81.7% of J. M. Smucker shares are owned by institutional investors. 1.6% of Ingredion shares are owned by company insiders. Comparatively, 2.2% of J. M. Smucker shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Ingredion pays an annual dividend of $3.28 per share and has a dividend yield of 3.2%. J. M. Smucker pays an annual dividend of $4.40 per share and has a dividend yield of 3.8%. Ingredion pays out 31.6% of its earnings in the form of a dividend. J. M. Smucker pays out -338.5% 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. Ingredion has raised its dividend for 14 consecutive years and J. M. Smucker has raised its dividend for 27 consecutive years. J. M. Smucker is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ingredion	9.36%	15.86%	8.66%
J. M. Smucker	-1.53%	17.18%	5.76%

Valuation & Earnings

This table compares Ingredion and J. M. Smucker”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ingredion	$7.22 billion	0.89	$729.00 million	$10.38	9.77
J. M. Smucker	$9.05 billion	1.36	-$138.70 million	($1.30)	-89.07

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

Volatility & Risk

Ingredion has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500. Comparatively, J. M. Smucker has a beta of 0.27, indicating that its stock price is 73% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Ingredion and J. M. Smucker, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ingredion	1	7	1	0	2.00
J. M. Smucker	1	9	10	0	2.45

Ingredion presently has a consensus price target of $122.43, indicating a potential upside of 20.71%. J. M. Smucker has a consensus price target of $121.13, indicating a potential upside of 4.61%. Given Ingredion’s higher probable upside, equities research analysts plainly believe Ingredion is more favorable than J. M. Smucker.

Summary

J. M. Smucker beats Ingredion on 9 of the 17 factors compared between the two stocks.

About Ingredion

Ingredion Incorporated, together with its subsidiaries, manufactures and sells sweeteners, starches, nutrition ingredients, and biomaterial solutions derived from wet milling and processing corn, and other starch-based materials to a range of industries in North America, South America, the Asia Pacific, Europe, the Middle East, and Africa. The company offers starch products for use in a range of processed foods; cornstarch; specialty paper starches for enhanced drainage, fiber retention, oil and grease resistance, improved printability, and biochemical oxygen demand control; starches and specialty starches for textile industry; industrial starches are used in the production of construction materials, textiles, adhesives, pharmaceuticals, and cosmetics, as well as in mining and water filtration; and specialty industrial starches for use in biomaterial applications, including biodegradable plastics, fabric softeners and detergents, hair and skin care applications, dusting powders for surgical gloves, and in the production of glass fiber and insulation. It also provides sweetener products comprising glucose syrups, high maltose syrup, high fructose corn syrup, dextrose, polyols, maltodextrin, glucose syrup solids, and non-genetically modified organism syrups for applications in food and beverage products, such as baked goods, snack foods, canned fruits, condiments, candy and other sweets, dairy products, ice cream, jams and jellies, prepared mixes, table syrups, and beverages. In addition, the company sells refined corn oil, corn gluten feed, and corn gluten meal; and other products, including fruit and vegetable products, such as concentrates, purees, and essences, as well as pulse proteins and hydrocolloids systems and blends. The company was formerly known as Corn Products International, Inc. and changed its name to Ingredion Incorporated in June 2012. Ingredion Incorporated was founded in 1906 and is headquartered in Westchester, Illinois.

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.