McCormick & Company, (NYSE: MKC) and Bunge Limited (NYSE:BG) are both large-cap consumer staples companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, dividends, institutional ownership and risk.
Earnings and Valuation
This table compares McCormick & Company, and Bunge Limited’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|McCormick & Company,||$4.48 billion||2.50||$776.80 million||$3.77||26.24|
|Bunge Limited||$45.99 billion||0.22||$1.29 billion||$3.43||21.15|
Bunge Limited has higher revenue and earnings than McCormick & Company,. Bunge Limited is trading at a lower price-to-earnings ratio than McCormick & Company,, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
McCormick & Company, has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500. Comparatively, Bunge Limited has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500.
McCormick & Company, pays an annual dividend of $1.88 per share and has a dividend yield of 1.9%. Bunge Limited pays an annual dividend of $1.84 per share and has a dividend yield of 2.5%. McCormick & Company, pays out 49.9% of its earnings in the form of a dividend. Bunge Limited pays out 53.6% 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. McCormick & Company, has increased its dividend for 15 consecutive years and Bunge Limited has increased its dividend for 30 consecutive years. Bunge Limited is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
72.9% of McCormick & Company, shares are owned by institutional investors. Comparatively, 80.4% of Bunge Limited shares are owned by institutional investors. 15.3% of McCormick & Company, shares are owned by insiders. Comparatively, 1.3% of Bunge Limited shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
This is a breakdown of current recommendations and price targets for McCormick & Company, and Bunge Limited, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|McCormick & Company,||0||5||4||0||2.44|
McCormick & Company, presently has a consensus price target of $102.75, suggesting a potential upside of 3.85%. Bunge Limited has a consensus price target of $83.71, suggesting a potential upside of 15.42%. Given Bunge Limited’s stronger consensus rating and higher probable upside, analysts plainly believe Bunge Limited is more favorable than McCormick & Company,.
This table compares McCormick & Company, and Bunge Limited’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|McCormick & Company,||10.69%||28.28%||10.36%|
About McCormick & Company,
McCormick & Company, Incorporated is engaged in manufacturing, marketing and distributing spices, seasoning mixes, condiments and other flavorful products to the food industry, including retailers, food manufacturers and foodservice businesses. The Company’s segments include consumer and industrial. The Company is involved in the manufacturing and sales of flavorful products. As of November 30, 2016, it offered brands for consumers in approximately 150 countries and territories. The Company’s brands in the Americas include McCormick, Lawry’s, and Club House, as well as brands, such as Gourmet Garden and OLD BAY. It provides a range of products to food manufacturers and foodservice customers. The Company’s sales, distribution and production facilities are located in North America, Europe and China. It markets regional and ethnic brands, such as Zatarain’s, Stubb’s, Thai Kitchen and Simply Asia. The Company offers sensory testing, culinary research, food safety and flavor application.
About Bunge Limited
Bunge Limited is an agribusiness and food company with integrated operations that stretch from the farm field to consumer foods. The Company operates through five segments: Agribusiness, Edible Oil Products, Milling Products, Sugar and Bioenergy, and Fertilizer. Its Agribusiness segment is an integrated, global business involved in the purchase, storage, transport, processing and sale of agricultural commodities and commodity products. Its edible oil products include packaged and bulk oils, shortenings, margarines, mayonnaise and other products derived from the vegetable oil refining process. Its milling products segment includes the production and sale of a range of wheat flours and bakery mixes. The Company is a producer and exporter of sugar. Through the Company’s operations in Argentina, it produces, blends and distributes a range of nitrogen, phosphate and potassium (NPK) fertilizers, including phosphate-based liquid and solid nitrogen fertilizers.
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