Critical Comparison: CocaCola (NYSE:KO) and MGP Ingredients (NASDAQ:MGPI)

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

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MGP Ingredients	$536.38 million	0.54	-$107.81 million	($11.26)	-1.19
CocaCola	$47.94 billion	7.92	$13.11 billion	$3.33	26.51

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

Institutional and Insider Ownership

77.1% of MGP Ingredients shares are held by institutional investors. Comparatively, 70.3% of CocaCola shares are held by institutional investors. 31.7% of MGP Ingredients shares are held by company insiders. Comparatively, 0.9% of CocaCola shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock 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 3.6%. CocaCola pays an annual dividend of $2.12 per share and has a dividend yield of 2.4%. MGP Ingredients pays out -4.3% of its earnings in the form of a dividend. CocaCola pays out 63.7% 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. CocaCola has increased its dividend for 64 consecutive years. MGP Ingredients is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
MGP Ingredients	-48.08%	7.41%	4.32%
CocaCola	28.56%	39.38%	13.18%

Analyst Recommendations

This is a breakdown of current recommendations for MGP Ingredients and CocaCola, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MGP Ingredients	1	2	3	0	2.33
CocaCola	0	3	14	1	2.89

MGP Ingredients presently has a consensus target price of $27.25, indicating a potential upside of 103.21%. CocaCola has a consensus target price of $95.76, indicating a potential upside of 8.47%. Given MGP Ingredients’ higher probable upside, research analysts plainly believe MGP Ingredients is more favorable than CocaCola.

Risk & Volatility

MGP Ingredients has a beta of 0.45, meaning that its share price is 55% less volatile than the S&P 500. Comparatively, CocaCola has a beta of 0.34, meaning that its share price is 66% less volatile than the S&P 500.

Summary

CocaCola beats MGP Ingredients on 12 of the 18 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 CocaCola

The Coca-Cola Company, a beverage company, manufactures, markets, and sells various nonalcoholic beverages worldwide. The company provides sparkling soft drinks, sparkling flavors; water, sports, coffee, and tea; juice, value-added dairy, and plant-based beverages; and other beverages. It also offers beverage concentrates and syrups, as well as fountain syrups to fountain retailers, such as restaurants and convenience stores. The company sells its products under the Coca-Cola, Diet Coke/Coca-Cola Light, Coca-Cola Zero Sugar, caffeine free Diet Coke, Cherry Coke, Fanta Orange, Fanta Zero Orange, Fanta Zero Sugar, Fanta Apple, Sprite, Sprite Zero Sugar, Simply Orange, Simply Apple, Simply Grapefruit, Fresca, Schweppes, Thums Up, Aquarius, Ayataka, BODYARMOR, Ciel, Costa, Dasani, dogadan, FUZE TEA, Georgia, glacéau smartwater, glacéau vitaminwater, Gold Peak, Ice Dew, I LOHAS, Powerade, Topo Chico, AdeS, Del Valle, fairlife, innocent, Minute Maid, and Minute Maid Pulpy brands. It operates through a network of independent bottling partners, distributors, wholesalers, and retailers, as well as through bottling and distribution operators. The company was founded in 1886 and is headquartered in Atlanta, Georgia.