Financial Review: Darling Ingredients (DAR) vs. McCormick & Company, (MKC)
McCormick & Company, (NYSE: MKC) and Darling Ingredients (NYSE:DAR) are both mid-cap consumer staples companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, valuation, dividends, profitability and analyst recommendations.
McCormick & Company, pays an annual dividend of $1.88 per share and has a dividend yield of 1.9%. Darling Ingredients does not pay a dividend. McCormick & Company, pays out 51.9% of its earnings in the form of a dividend. McCormick & Company, has raised its dividend for 30 consecutive years.
This table compares McCormick & Company, and Darling Ingredients’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|McCormick & Company,||10.05%||26.09%||8.17%|
Institutional and Insider Ownership
70.1% of McCormick & Company, shares are owned by institutional investors. Comparatively, 95.6% of Darling Ingredients shares are owned by institutional investors. 15.3% of McCormick & Company, shares are owned by company insiders. Comparatively, 2.0% of Darling Ingredients shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares McCormick & Company, and Darling Ingredients’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|McCormick & Company,||$4.41 billion||2.88||$472.30 million||$3.62||26.77|
|Darling Ingredients||$3.40 billion||0.85||$102.31 million||$0.51||34.29|
McCormick & Company, has higher revenue and earnings than Darling Ingredients. McCormick & Company, is trading at a lower price-to-earnings ratio than Darling Ingredients, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent recommendations and price targets for McCormick & Company, and Darling Ingredients, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|McCormick & Company,||0||6||4||0||2.40|
McCormick & Company, presently has a consensus target price of $105.11, indicating a potential upside of 8.47%. Darling Ingredients has a consensus target price of $19.00, indicating a potential upside of 8.63%. Given Darling Ingredients’ stronger consensus rating and higher possible upside, analysts plainly believe Darling Ingredients is more favorable than McCormick & Company,.
Risk and Volatility
McCormick & Company, has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500. Comparatively, Darling Ingredients has a beta of 1.54, indicating that its stock price is 54% more volatile than the S&P 500.
McCormick & Company, beats Darling Ingredients on 10 of the 16 factors compared between the two stocks.
McCormick & Company, Company Profile
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.
Darling Ingredients Company Profile
Darling Ingredients Inc. (Darling) is a developer and producer of sustainable natural ingredients from edible and inedible bio-nutrients, creating a range of ingredients and customized specialty solutions for customers in the pharmaceutical, food, pet food, feed, industrial, fuel, bioenergy and fertilizer industries. The Company operates through three segments: Feed Ingredients, Food Ingredients and Fuel Ingredients. The Company collects and transforms all aspects of animal by-product streams into useable and specialty ingredients, such as gelatin, edible fats, feed-grade fats, animal proteins and meals, plasma, pet food ingredients, organic fertilizers, yellow grease, fuel feedstocks, green energy, natural casings and hides. In addition, the Company provides grease trap services to food service establishments, environmental services to food processors and sells restaurant cooking oil delivery and collection equipment.
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