Critical Contrast: MGP Ingredients (NASDAQ:MGPI) and Compania Cervecerias Unidas (NYSE:CCU)

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

Analyst Ratings

This is a summary of recent ratings and recommmendations for MGP Ingredients and Compania Cervecerias Unidas, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MGP Ingredients	0	1	4	0	2.80
Compania Cervecerias Unidas	1	1	0	0	1.50

MGP Ingredients presently has a consensus target price of $50.33, suggesting a potential upside of 82.37%. Compania Cervecerias Unidas has a consensus target price of $10.00, suggesting a potential downside of 16.60%. Given MGP Ingredients’ stronger consensus rating and higher probable upside, research analysts clearly believe MGP Ingredients is more favorable than Compania Cervecerias Unidas.

Risk and Volatility

MGP Ingredients has a beta of 0.35, meaning that its share price is 65% less volatile than the S&P 500. Comparatively, Compania Cervecerias Unidas has a beta of 0.73, meaning that its share price is 27% less volatile than the S&P 500.

Profitability

This table compares MGP Ingredients and Compania Cervecerias Unidas’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MGP Ingredients	-1.08%	10.66%	6.49%
Compania Cervecerias Unidas	4.93%	9.01%	3.87%

Institutional and Insider Ownership

77.1% of MGP Ingredients shares are held by institutional investors. Comparatively, 24.1% of Compania Cervecerias Unidas shares are held by institutional investors. 34.4% of MGP Ingredients shares are held by insiders. Comparatively, 8.4% of Compania Cervecerias Unidas shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

MGP Ingredients pays an annual dividend of $0.48 per share and has a dividend yield of 1.7%. Compania Cervecerias Unidas pays an annual dividend of $0.26 per share and has a dividend yield of 2.2%. MGP Ingredients pays out -154.8% of its earnings in the form of a dividend. Compania Cervecerias Unidas pays out 30.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Earnings and Valuation

This table compares MGP Ingredients and Compania Cervecerias Unidas”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MGP Ingredients	$703.62 million	0.84	$34.66 million	($0.31)	-89.03
Compania Cervecerias Unidas	$3.08 billion	0.72	$177.04 million	$0.85	14.11

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

Summary

MGP Ingredients beats Compania Cervecerias Unidas on 9 of the 16 factors compared between the two stocks.

About MGP Ingredients

MGP Ingredients, Inc., together with its subsidiaries, engages in the production and supply of distilled spirits, branded spirits, and food ingredients in the United States and internationally. The company operates through three segments: Distillery Solutions; Branded Spirits; and Ingredient Solutions. The Distillery Solutions segment provides food grade alcohol for beverage applications that include bourbon, rye, whiskeys, as well as grain neutral spirits, include vodka and gin; and food-grade industrial alcohol, which is used as an ingredient in food products, personal care products, cleaning solutions, pharmaceuticals, and various other products. This segment also offers distillery co-products, such as dried distillers’ grain, fuel-grade alcohol for blending with gasoline, and corn oil; and provides warehouse services, including barrel put away, barrel storage, and barrel retrieval services, as well as blending services. The Branded Spirits segment provides premium plus, ultra-premium, super premium, premium, mid, and value branded distilled spirits, as well as private label products. The Ingredient Solutions segment provides specialty wheat starches for food applications under the Fibersym, Resistant Starch series, and FiberRite RW Resistant Starch names; specialty wheat proteins for food applications under the Arise and Proterra names; gluten-free textured pea proteins; commodity wheat starch for food and non-food applications; and commodity wheat proteins. It sells its products directly or through distributors to manufacturers and processors of finished packaged goods or to bakeries. The company was founded in 1941 and is based in Atchison, Kansas.

About Compania Cervecerias Unidas

Compañía Cervecerías Unidas S.A. operates as a beverage company in Chile, Argentina, Bolivia, Colombia, Paraguay, and Uruguay. The company operates through three segments: Chile, International Business, and Wine. It produces and sells alcoholic and non-alcoholic beer under proprietary and licensed brands, as well as distributes Pernod Ricard products in non-supermarket retail stores. The company also produces and sells non-alcoholic beverages, including carbonated soft drinks, nectars and juices, sports and energy drinks, and ice tea; and mineral, purified, and flavored bottled water, as well as ready-to-mix products with instant powder drinks. In addition, it is involved in the production and distribution of pisco, cocktails, rum, flavored alcoholic beverages, gin, and cider. The company serves small and medium-sized retail outlets; retail establishments, such as restaurants, hotels, and bars; wholesalers; and supermarket chains. It also exports its products to Europe, Latin America, the United States, Canada, Asia, Oceania, and internationally. The company was founded in 1850 and is based in Santiago, Chile. Compañía Cervecerías Unidas S.A. is a subsidiary of Inversiones y Rentas S.A.