Head to Head Review: Ingredion (NYSE:INGR) versus Pilgrim's Pride (PPC)

Ingredion (NYSE: INGR) and Pilgrim's Pride (NASDAQ:PPC) are both mid-cap consumer staples companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, institutional ownership, earnings, valuation and profitability.

Profitability

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This table compares Ingredion and Pilgrim's Pride’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ingredion 8.63% 20.42% 9.61%
Pilgrim's Pride 7.08% 49.74% 14.56%

Earnings & Valuation

This table compares Ingredion and Pilgrim's Pride’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ingredion $6.18 billion 1.52 $519.00 million $7.70 16.87
Pilgrim's Pride $10.77 billion 0.55 $694.57 million $2.89 8.26

Pilgrim's Pride has higher revenue and earnings than Ingredion. Pilgrim's Pride is trading at a lower price-to-earnings ratio than Ingredion, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Ingredion has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500. Comparatively, Pilgrim's Pride has a beta of 0.19, meaning that its stock price is 81% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Ingredion and Pilgrim's Pride, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ingredion 0 1 3 0 2.75
Pilgrim's Pride 0 5 2 0 2.29

Ingredion currently has a consensus target price of $142.00, suggesting a potential upside of 9.32%. Pilgrim's Pride has a consensus target price of $29.25, suggesting a potential upside of 22.49%. Given Pilgrim's Pride’s higher probable upside, analysts plainly believe Pilgrim's Pride is more favorable than Ingredion.

Dividends

Ingredion pays an annual dividend of $2.40 per share and has a dividend yield of 1.8%. Pilgrim's Pride does not pay a dividend. Ingredion pays out 31.2% of its earnings in the form of a dividend. Ingredion has increased its dividend for 5 consecutive years.

Insider and Institutional Ownership

86.5% of Ingredion shares are owned by institutional investors. Comparatively, 25.1% of Pilgrim's Pride shares are owned by institutional investors. 1.9% of Ingredion shares are owned by insiders. Comparatively, 78.8% of Pilgrim's Pride shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Ingredion beats Pilgrim's Pride on 10 of the 17 factors compared between the two stocks.

About Ingredion

Ingredion Incorporated, together with its subsidiaries, produces and sells starches and sweeteners for various industries. The company operates through four segments: North America, South America, Asia Pacific and Europe, and Middle East and Africa. It offers sweetener products comprising glucose syrups, high maltose syrups, high fructose corn syrups, caramel colors, dextrose, polyols, maltodextrins, glucose and syrup solids, as well as food-grade and industrial starches, and biomaterials. The company also provides animal feed products; edible corn oil; refined corn oil to packers of cooking oil and to producers of margarine, salad dressings, shortening, mayonnaise, and other foods; and corn gluten feed used as protein feed for chickens, pet food, and aquaculture. Its products are derived primarily from processing corn and other starch-based materials, such as tapioca, potato, and rice. The company serves food, beverage, paper and corrugating products, brewing, pharmaceutical, textile, and personal care industries, as well as animal feed and corn oil markets. 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 Pilgrim's Pride

Pilgrim’s Pride Corporation is a retail feed store. It is a producer and seller of chicken with operations in the United States, Mexico and Puerto Rico. It is engaged in the production, processing, marketing and distribution of fresh, frozen and value-added chicken products to retailers, distributors and foodservice operators. It offers a range of products to its customers through national and international distribution channels. Its fresh chicken products consist of refrigerated (non-frozen) whole chickens, whole cut-up chickens and selected chicken parts that are either marinated or non-marinated. Its prepared chicken products include ready-to-cook and individually frozen chicken parts, strips, nuggets and patties, some of which are either breaded or non-breaded and either marinated or non-marinated. As of December 25, 2016, the Company marketed its portfolio of fresh, prepared and value-added chicken products across the United States, Mexico and in approximately 80 other countries.

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