McCormick & Company, Incorporated (NYSE: MKC) and Ralcorp (NYSE:RAH) are both consumer staples companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, earnings, profitability, dividends, analyst recommendations, valuation and institutional ownership.
Institutional and Insider Ownership
76.3% of McCormick & Company, Incorporated shares are owned by institutional investors. 15.3% of McCormick & Company, Incorporated shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This is a summary of recent ratings and price targets for McCormick & Company, Incorporated and Ralcorp, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|McCormick & Company, Incorporated||0||6||3||0||2.33|
McCormick & Company, Incorporated presently has a consensus price target of $105.75, indicating a potential upside of 2.67%.
This table compares McCormick & Company, Incorporated and Ralcorp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|McCormick & Company, Incorporated||10.05%||26.09%||8.17%|
Earnings & Valuation
This table compares McCormick & Company, Incorporated and Ralcorp’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|McCormick & Company, Incorporated||$4.41 billion||3.06||$472.30 million||$3.62||28.45|
McCormick & Company, Incorporated has higher revenue and earnings than Ralcorp. Ralcorp is trading at a lower price-to-earnings ratio than McCormick & Company, Incorporated, indicating that it is currently the more affordable of the two stocks.
McCormick & Company, Incorporated pays an annual dividend of $1.88 per share and has a dividend yield of 1.8%. Ralcorp does not pay a dividend. McCormick & Company, Incorporated pays out 51.9% of its earnings in the form of a dividend. McCormick & Company, Incorporated has increased its dividend for 30 consecutive years.
McCormick & Company, Incorporated beats Ralcorp on 10 of the 11 factors compared between the two stocks.
About McCormick & Company, Incorporated
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.
Ralcorp Holdings, Inc. (Ralcorp) is engaged in manufacturing, distributing and marketing private-brand food products and other regional and value-brand food products in the grocery, mass merchandise, drugstore and foodservice channels. The Company’s products include nutritional bars; snack mixes, corn-based chips and extruded corn snack products; crackers and cookies; snack nuts; chocolate candy; salad dressings; mayonnaise; peanut butter; jams and jellies; syrups; sauces; frozen griddle products, including pancakes, waffles and French toast; frozen biscuits and other frozen pre-baked products, such as breads and rolls; frozen and refrigerated doughs, and dry pasta. In May 2012, the Company acquired Petri Baking Products, Inc. In June 2012, the Company acquired Gelit S.r.l., a producer of frozen ready meals in Italy. In January 2013, ConAgra Foods Inc acquired the Company.
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