Penford (NASDAQ: PENX) and Kraft Heinz (NASDAQ:KHC) are both non-cyclical consumer goods & services companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, analyst recommendations, profitability and earnings.
Kraft Heinz pays an annual dividend of $2.50 per share and has a dividend yield of 3.1%. Penford does not pay a dividend. Kraft Heinz pays out 77.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
62.0% of Kraft Heinz shares are owned by institutional investors. 26.9% of Kraft Heinz shares are owned by company 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.
Earnings and Valuation
This table compares Penford and Kraft Heinz’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Kraft Heinz||$26.49 billion||3.69||$3.63 billion||$3.21||24.98|
Kraft Heinz has higher revenue and earnings than Penford. Kraft Heinz is trading at a lower price-to-earnings ratio than Penford, indicating that it is currently the more affordable of the two stocks.
This is a summary of current recommendations for Penford and Kraft Heinz, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Kraft Heinz has a consensus target price of $92.71, suggesting a potential upside of 15.65%. Given Kraft Heinz’s higher probable upside, analysts clearly believe Kraft Heinz is more favorable than Penford.
This table compares Penford and Kraft Heinz’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Kraft Heinz beats Penford on 9 of the 12 factors compared between the two stocks.
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.
About Kraft Heinz
The Kraft Heinz Company is a food and beverage company. The Company is engaged in the manufacturing and marketing of food and beverage products, including condiments and sauces, cheese and dairy, meals, meats, refreshment beverages, coffee and other grocery products. The Company’s segments include the United States, Canada and Europe. The Company’s remaining businesses are combined as Rest of World. The Rest of World consists of Latin America and Asia, Middle East and Africa (AMEA). The Company provides products for various occasions whether at home, in restaurants or on the go. The Company’s brands include Heinz, Kraft, Oscar Mayer, Philadelphia, Planters, Velveeta, Lunchables, Maxwell House, Capri Sun, and Ore-Ida. The Company’s products are sold through its own sales organizations and through independent brokers, agents and distributors to chain, wholesale, cooperative and independent grocery accounts, convenience stores, drug stores, value stores, bakeries and pharmacies.
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