Kellogg (K) vs. MGP Ingredients (MGPI) Financial Comparison

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

Insider and Institutional Ownership

89.7% of Kellogg shares are owned by institutional investors. 1.3% of Kellogg shares are owned by insiders. Comparatively, 23.5% of MGP Ingredients shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Kellogg has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500. Comparatively, MGP Ingredients has a beta of 0.95, indicating that its share price is 5% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Kellogg and MGP Ingredients, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kellogg 2 8 3 0 2.08
MGP Ingredients 0 2 2 0 2.50

Kellogg presently has a consensus price target of $71.50, suggesting a potential upside of 9.92%. MGP Ingredients has a consensus price target of $68.33, suggesting a potential downside of 7.47%. Given Kellogg’s higher probable upside, analysts clearly believe Kellogg is more favorable than MGP Ingredients.

Valuation and Earnings

This table compares Kellogg and MGP Ingredients’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kellogg $13.01 billion 1.73 $694.00 million $2.24 29.04
MGP Ingredients $328.08 million 3.77 $31.18 million $2.17 34.03

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

Profitability

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

Net Margins Return on Equity Return on Assets
Kellogg 6.15% 73.92% 9.27%
MGP Ingredients 10.56% 18.70% 12.39%

Dividends

Kellogg pays an annual dividend of $2.16 per share and has a dividend yield of 3.3%. MGP Ingredients pays an annual dividend of $0.16 per share and has a dividend yield of 0.2%. Kellogg pays out 96.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MGP Ingredients pays out 7.4% of its earnings in the form of a dividend. MGP Ingredients has raised its dividend for 12 consecutive years.

Summary

MGP Ingredients beats Kellogg on 9 of the 17 factors compared between the two stocks.

Kellogg Company Profile

Kellogg Company is a manufacturer and marketer of ready-to-eat cereal and convenience foods. The Company’s principal products are ready-to-eat cereals and convenience foods, such as cookies, crackers, savory snacks, toaster pastries, cereal bars, fruit-flavored snacks, frozen waffles and veggie foods. Its segments include U.S. Morning Foods, which includes cereal, toaster pastries, health and wellness bars, and beverages; U.S. Snacks, which includes cookies, crackers, cereal bars, savory snacks and fruit-flavored snacks; U.S. Specialty, which represents food away from home channels, including food service, convenience, vending, Girl Scouts and food manufacturing; North America Other, which includes the U.S. Frozen, Kashi and Canada operating segments; Europe, which consists of European countries; Latin America, which consists of Central and South America and includes Mexico, and Asia Pacific, which consists of Sub-Saharan Africa, Australia and other Asian and Pacific markets.

MGP Ingredients Company Profile

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.

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