J. M. Smucker (NYSE:SJM) versus McCormick & Company, Incorporated (NYSE:MKC) Critical Survey

J. M. Smucker (NYSE:SJM) and McCormick & Company, Incorporated (NYSE:MKC) are both large-cap consumer staples companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, valuation, earnings and profitability.

Valuation and Earnings

This table compares J. M. Smucker and McCormick & Company, Incorporated”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
J. M. Smucker	$9.05 billion	1.36	-$138.70 million	($1.30)	-88.88
McCormick & Company, Incorporated	$6.84 billion	2.00	$789.40 million	$6.01	8.49

McCormick & Company, Incorporated has lower revenue, but higher earnings than J. M. Smucker. J. M. Smucker 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.

Risk & Volatility

J. M. Smucker has a beta of 0.27, suggesting that its stock price is 73% less volatile than the S&P 500. Comparatively, McCormick & Company, Incorporated has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500.

Profitability

This table compares J. M. Smucker and McCormick & Company, Incorporated’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
J. M. Smucker	-1.53%	17.18%	5.76%
McCormick & Company, Incorporated	21.91%	12.78%	5.76%

Dividends

J. M. Smucker pays an annual dividend of $4.40 per share and has a dividend yield of 3.8%. McCormick & Company, Incorporated pays an annual dividend of $1.92 per share and has a dividend yield of 3.8%. J. M. Smucker pays out -338.5% of its earnings in the form of a dividend. McCormick & Company, Incorporated pays out 31.9% 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. J. M. Smucker has raised its dividend for 27 consecutive years and McCormick & Company, Incorporated has raised its dividend for 38 consecutive years. J. M. Smucker is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

81.7% of J. M. Smucker shares are owned by institutional investors. Comparatively, 79.7% of McCormick & Company, Incorporated shares are owned by institutional investors. 2.2% of J. M. Smucker shares are owned by company insiders. Comparatively, 10.6% of McCormick & Company, Incorporated 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.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for J. M. Smucker and McCormick & Company, Incorporated, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
J. M. Smucker	1	9	10	0	2.45
McCormick & Company, Incorporated	1	6	6	0	2.38

J. M. Smucker presently has a consensus price target of $121.13, suggesting a potential upside of 4.83%. McCormick & Company, Incorporated has a consensus price target of $60.50, suggesting a potential upside of 18.62%. Given McCormick & Company, Incorporated’s higher probable upside, analysts plainly believe McCormick & Company, Incorporated is more favorable than J. M. Smucker.

Summary

McCormick & Company, Incorporated beats J. M. Smucker on 9 of the 16 factors compared between the two stocks.

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.

About McCormick & Company, Incorporated

McCormick & Co., Inc. engages in the manufacturing, marketing, and distribution of spices, seasoning mixes, condiments, and other flavorful products to retail outlets, food manufacturers, and foodservice businesses. It operates through the Consumer and Flavor Solutions segments. The Consumer segment sells spices, seasonings, condiments, and sauces. The Flavor Solutions segment includes seasoning blends, spices and herbs, condiments, coating systems, and compound flavors. The company was founded by Willoughby M. McCormick in 1889 and is headquartered in Baltimore, MD.