Critical Review: MGP Ingredients (MGPI) and Remy Cointreau (REMYY)

MGP Ingredients (NASDAQ: MGPI) and Remy Cointreau (OTCMKTS:REMYY) are both consumer staples companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, risk, valuation, dividends, earnings, profitability and institutional ownership.

Institutional & Insider Ownership

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95.0% of MGP Ingredients shares are owned by institutional investors. Comparatively, 0.0% of Remy Cointreau shares are owned by institutional investors. 22.2% of MGP Ingredients shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

MGP Ingredients has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500. Comparatively, Remy Cointreau has a beta of -0.72, suggesting that its share price is 172% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for MGP Ingredients and Remy Cointreau, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MGP Ingredients 0 1 3 0 2.75
Remy Cointreau 0 1 1 0 2.50

MGP Ingredients presently has a consensus price target of $89.00, suggesting a potential upside of 1.48%. Given MGP Ingredients’ stronger consensus rating and higher possible upside, equities analysts clearly believe MGP Ingredients is more favorable than Remy Cointreau.

Valuation & Earnings

This table compares MGP Ingredients and Remy Cointreau’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MGP Ingredients $347.45 million 4.25 $41.82 million $1.87 46.90
Remy Cointreau $1.20 billion 5.81 $208.72 million $0.30 46.83

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

Profitability

This table compares MGP Ingredients and Remy Cointreau’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MGP Ingredients 11.71% 18.76% 12.68%
Remy Cointreau N/A N/A N/A

Dividends

MGP Ingredients pays an annual dividend of $0.32 per share and has a dividend yield of 0.4%. Remy Cointreau pays an annual dividend of $0.14 per share and has a dividend yield of 1.0%. MGP Ingredients pays out 17.1% of its earnings in the form of a dividend. Remy Cointreau pays out 46.7% 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.

Summary

MGP Ingredients beats Remy Cointreau on 11 of the 15 factors compared between the two stocks.

MGP Ingredients Company Profile

MGP Ingredients, Inc., together with its subsidiaries, produces and supplies distilled spirits, and specialty wheat proteins and starch food ingredients. It operates in two segments, Distillery Products and Ingredient Solutions. The Distillery Products segment provides food grade alcohol for beverage applications that include bourbon and rye whiskeys, as well as grain neutral spirits, including vodka and gin; and food grade industrial alcohol, which is used as an ingredient in foods, personal care products, cleaning solutions, pharmaceuticals, and various other products. This segment also provides distillery co-products, such as distillers feed, fuel grade alcohol, and corn oil; and warehouse services, including barrel put away, storage, and retrieval services. The Ingredient Solutions segment provides specialty wheat starches for food applications under the trademarks Fibersym Resistant Starch series, FiberRite RW Resistant Starch, Pregel Instant Starch series, and Midsol Cook-up Starch series; and specialty wheat proteins, commodity wheat starch, and commodity wheat proteins. The company sells its products directly or through distributors to the manufacturers and processors of finished packaged goods or to bakeries primarily in the United States, Japan, Thailand, and Canada. MGP Ingredients, Inc. was founded in 1941 and is headquartered in Atchison, Kansas.

Remy Cointreau Company Profile

Rémy Cointreau SA, together with its subsidiaries, produces and distributes liqueurs and spirits. It operates through Rémy Martin, Liqueurs & Spirits, and Partner Brands segments. The company produces a range of cognacs under the Rémy Martin and Louis XIII brands. It offers liqueurs and spirits primarily under the Cointreau, Metaxa, Mount Gay, St-Rémy, The Botanist, Bruichladdich, Port Charlotte, Octomore, Westland, and Domaine des Hautes Glaces brands. The company markets its products through distributors, agents, and wholesalers in Europe, the Middle East, Africa, the Americas, and the Asia-Pacific. Rémy Cointreau SA was founded in 1724 and is headquartered in Cognac, France.

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