Critical Review: Penford (NASDAQ:PENX) vs. Its Competitors

Penford (NASDAQ: PENX) is one of 6 publicly-traded companies in the “Food Processing – NEC” industry, but how does it compare to its peers? We will compare Penford to related companies based on the strength of its valuation, institutional ownership, risk, dividends, analyst recommendations, earnings and profitability.

Valuation & Earnings

This table compares Penford and its peers gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Penford N/A N/A 26.36
Penford Competitors $821.18 million $18.78 million 18.11

Penford’s peers have higher revenue and earnings than Penford. Penford is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Penford and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Penford 2.06% 8.92% 3.56%
Penford Competitors 5.94% 20.12% 6.27%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Penford and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Penford 0 0 0 0 N/A
Penford Competitors 11 51 81 1 2.50

As a group, “Food Processing – NEC” companies have a potential upside of 28.27%. Given Penford’s peers higher possible upside, analysts plainly believe Penford has less favorable growth aspects than its peers.

Institutional and Insider Ownership

45.4% of shares of all “Food Processing – NEC” companies are held by institutional investors. 36.1% of shares of all “Food Processing – NEC” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Penford has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500. Comparatively, Penford’s peers have a beta of 0.64, suggesting that their average share price is 36% less volatile than the S&P 500.

Summary

Penford peers beat Penford on 7 of the 9 factors compared.

Penford Company Profile

Penford Corporation (Penford) is a developer, manufacturer and marketer of natural-based ingredient systems for food and industrial applications, including fuel grade ethanol. The Company has research and development capabilities, which are used in understanding the complex chemistry of carbohydrate-based materials and in developing applications to address customer needs. Penford operates in two business segments: Industrial Ingredients and Food Ingredients. Industrial Ingredients segment is a supplier of chemically modified starches to the paper and packaging industries. Industrial Ingredients also produces food grade corn starch for sale by the Company’s Food Ingredients business. Food Ingredients segment is a developer and manufacturer of specialty starches and dextrins to the food manufacturing and food service industries. This business is engaged is in leveraging the inherent characteristics from potato, corn, tapioca and rice to help improve its customers’ product performance.

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