Ralcorp (NYSE: RAH) and General Mills (NYSE:GIS) are both non-cyclical consumer goods & services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, profitability, valuation, risk, dividends, analyst recommendations and institutional ownership.

Valuation and Earnings

This table compares Ralcorp and General Mills’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ralcorp N/A N/A N/A $1.03 N/A
General Mills $15.62 billion 2.16 $1.66 billion $2.73 21.73

General Mills has higher revenue and earnings than Ralcorp. Ralcorp is trading at a lower price-to-earnings ratio than General Mills, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

72.6% of General Mills shares are owned by institutional investors. 1.4% of General Mills shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Ralcorp and General Mills’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ralcorp N/A N/A N/A
General Mills 10.29% 38.89% 7.95%

Dividends

General Mills pays an annual dividend of $1.96 per share and has a dividend yield of 3.3%. Ralcorp does not pay a dividend. General Mills pays out 71.8% of its earnings in the form of a dividend. General Mills has raised its dividend for 14 consecutive years.

Analyst Recommendations

This is a summary of current recommendations and price targets for Ralcorp and General Mills, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ralcorp 0 0 0 0 N/A
General Mills 2 14 2 0 2.00

General Mills has a consensus price target of $58.14, indicating a potential downside of 1.98%.

Summary

General Mills beats Ralcorp on 10 of the 11 factors compared between the two stocks.

Ralcorp Company Profile

Ralcorp Holdings, Inc. (Ralcorp) is engaged in manufacturing, distributing and marketing private-brand food products and other regional and value-brand food products in the grocery, mass merchandise, drugstore and foodservice channels. The Company’s products include nutritional bars; snack mixes, corn-based chips and extruded corn snack products; crackers and cookies; snack nuts; chocolate candy; salad dressings; mayonnaise; peanut butter; jams and jellies; syrups; sauces; frozen griddle products, including pancakes, waffles and French toast; frozen biscuits and other frozen pre-baked products, such as breads and rolls; frozen and refrigerated doughs, and dry pasta. In May 2012, the Company acquired Petri Baking Products, Inc. In June 2012, the Company acquired Gelit S.r.l., a producer of frozen ready meals in Italy. In January 2013, ConAgra Foods Inc acquired the Company.

General Mills Company Profile

General Mills, Inc. is a manufacturer and marketer of branded consumer foods sold through retail stores. The Company is a supplier of branded and unbranded food products to the North American foodservice and commercial baking industries. The Company has three segments: U.S. Retail, International, and Convenience Stores and Foodservice. Its products are marketed under various brands, which include Annie’s and Betty Crocker. The Company’s U.S. Retail segment reflects business with a range of grocery stores, mass merchandisers, membership stores, natural food chains, drug, dollar and discount chains, and e-commerce grocery providers operating throughout the United States. The International segment consists of retail and foodservice businesses outside of the United States. The Convenience Stores and Foodservice segment’s product categories include ready-to-eat cereals, snacks, refrigerated yogurt, frozen meals, unbaked and fully baked frozen dough products, and baking mixes.

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