MGP Ingredients (NASDAQ: MGPI) and Conagra Brands (NYSE:CAG) are both consumer staples companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, institutional ownership, valuation, dividends and profitability.

Volatility and Risk

MGP Ingredients has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, Conagra Brands has a beta of 0.32, suggesting that its share price is 68% less volatile than the S&P 500.

Earnings and Valuation

This table compares MGP Ingredients and Conagra Brands’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
MGP Ingredients $328.08 million 3.74 $31.18 million $2.17 33.82
Conagra Brands $7.83 billion 1.86 $639.30 million $1.41 25.33

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

Analyst Recommendations

This is a breakdown of recent ratings and price targets for MGP Ingredients and Conagra Brands, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MGP Ingredients 0 1 2 0 2.67
Conagra Brands 1 1 8 0 2.70

MGP Ingredients presently has a consensus price target of $66.00, suggesting a potential downside of 10.06%. Conagra Brands has a consensus price target of $40.78, suggesting a potential upside of 14.19%. Given Conagra Brands’ stronger consensus rating and higher probable upside, analysts plainly believe Conagra Brands is more favorable than MGP Ingredients.

Profitability

This table compares MGP Ingredients and Conagra Brands’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MGP Ingredients 10.56% 18.70% 12.39%
Conagra Brands 7.83% 18.35% 7.29%

Institutional & Insider Ownership

78.8% of Conagra Brands shares are owned by institutional investors. 23.5% of MGP Ingredients shares are owned by insiders. Comparatively, 0.8% of Conagra Brands shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

MGP Ingredients pays an annual dividend of $0.16 per share and has a dividend yield of 0.2%. Conagra Brands pays an annual dividend of $0.85 per share and has a dividend yield of 2.4%. MGP Ingredients pays out 7.4% of its earnings in the form of a dividend. Conagra Brands pays out 60.3% 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 Conagra Brands on 9 of the 16 factors compared between the two stocks.

About MGP Ingredients

MGP Ingredients, Inc. is a producer and supplier of distilled spirits, and specialty wheat protein and starch food ingredients. The Company’s distilled spirits include bourbon and rye whiskeys, and grain neutral spirits, including vodka and gin. The Company’s segments include distillery products and ingredient solutions. The distillery products segment consists of food grade alcohol and distillery co-products, such as distillers feed and fuel grade alcohol. The ingredient solutions segment consists of specialty starches and proteins, commodity starches and commodity proteins. The distillery products segment also includes warehouse services, including barrel put away, barrel storage, and barrel retrieval services. It is also a producer of industrial alcohol for use in both food and non-food applications. The Company’s distillery products are derived from corn and other grains (including rye, barley, wheat, barley malt and milo), and its ingredient products are derived from wheat flour.

About Conagra Brands

Conagra Brands, Inc., formerly ConAgra Foods, Inc., operates as a packaged food company. The Company operates through two segments: Consumer Foods and Commercial Foods. The Company sells branded and customized food products, as well as commercially branded foods. It also supplies vegetable, spice and grain products to a range of restaurants, foodservice operators and commercial customers. Conagra Foodservice offers products to restaurants, retailers, commercial customers and other foodservice suppliers. The Company also operates in the countries outside the United States, such as Canada and Mexico. The Company’s brands include Marie Callender’s, Healthy Choice, Slim Jim, Hebrew National, Orville Redenbacher’s, Peter Pan, Reddi-wip, PAM, Snack Pack, Banquet, Chef Boyardee, Egg Beaters, Rosarita, Fleischmann’s and Hunt’s. The Company sells its products in grocery, convenience, mass merchandise and club stores.

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