Financial Comparison: Kraft Heinz (NASDAQ:KHC) & Ingredion (NYSE:INGR)

Kraft Heinz (NASDAQ:KHC) and Ingredion (NYSE:INGR) are both consumer staples companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, institutional ownership, valuation, dividends, risk, analyst recommendations and earnings.

Valuation and Earnings

This table compares Kraft Heinz and Ingredion”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kraft Heinz	$24.94 billion	1.16	-$5.85 billion	($4.86)	-5.02
Ingredion	$7.22 billion	0.89	$729.00 million	$10.38	9.77

Ingredion has lower revenue, but higher earnings than Kraft Heinz. Kraft Heinz is trading at a lower price-to-earnings ratio than Ingredion, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Kraft Heinz and Ingredion’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kraft Heinz	-23.05%	7.26%	3.70%
Ingredion	9.36%	15.86%	8.66%

Dividends

Kraft Heinz pays an annual dividend of $1.60 per share and has a dividend yield of 6.6%. Ingredion pays an annual dividend of $3.28 per share and has a dividend yield of 3.2%. Kraft Heinz pays out -32.9% of its earnings in the form of a dividend. Ingredion pays out 31.6% 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. Ingredion has raised its dividend for 14 consecutive years. Kraft Heinz is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

78.2% of Kraft Heinz shares are held by institutional investors. Comparatively, 85.3% of Ingredion shares are held by institutional investors. 0.2% of Kraft Heinz shares are held by insiders. Comparatively, 1.6% of Ingredion shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Kraft Heinz and Ingredion, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kraft Heinz	5	14	0	1	1.85
Ingredion	1	7	1	0	2.00

Kraft Heinz presently has a consensus target price of $22.69, suggesting a potential downside of 6.98%. Ingredion has a consensus target price of $122.43, suggesting a potential upside of 20.71%. Given Ingredion’s stronger consensus rating and higher possible upside, analysts clearly believe Ingredion is more favorable than Kraft Heinz.

Volatility & Risk

Kraft Heinz has a beta of 0.08, indicating that its stock price is 92% less volatile than the S&P 500. Comparatively, Ingredion has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500.

Summary

Ingredion beats Kraft Heinz on 13 of the 18 factors compared between the two stocks.

About Kraft Heinz

The Kraft Heinz Company, together with its subsidiaries, manufactures and markets food and beverage products in North America and internationally. Its products include condiments and sauces, cheese and dairy products, meals, meats, refreshment beverages, coffee, and other grocery products under the Kraft, Oscar Mayer, Heinz, Philadelphia, Lunchables, Velveeta, Ore-Ida, Maxwell House, Kool-Aid, Jell-O, Heinz, ABC, Master, Quero, Kraft, Golden Circle, Wattie's, Pudliszki, and Plasmon brands. It sells its products through its own sales organizations, as well as through independent brokers, agents, and distributors to chain, wholesale, cooperative, and independent grocery accounts; convenience, value, and club stores; pharmacies and drug stores; mass merchants; foodservice distributors; institutions, including hotels, restaurants, bakeries, hospitals, health care facilities, and government agencies; and online through various e-commerce platforms and retailers. The company was formerly known as H.J. Heinz Holding Corporation and changed its name to The Kraft Heinz Company in July 2015. The Kraft Heinz Company was founded in 1869 and is based in Pittsburgh, Pennsylvania.

About Ingredion

Ingredion Incorporated, together with its subsidiaries, manufactures and sells sweeteners, starches, nutrition ingredients, and biomaterial solutions derived from wet milling and processing corn, and other starch-based materials to a range of industries in North America, South America, the Asia Pacific, Europe, the Middle East, and Africa. The company offers starch products for use in a range of processed foods; cornstarch; specialty paper starches for enhanced drainage, fiber retention, oil and grease resistance, improved printability, and biochemical oxygen demand control; starches and specialty starches for textile industry; industrial starches are used in the production of construction materials, textiles, adhesives, pharmaceuticals, and cosmetics, as well as in mining and water filtration; and specialty industrial starches for use in biomaterial applications, including biodegradable plastics, fabric softeners and detergents, hair and skin care applications, dusting powders for surgical gloves, and in the production of glass fiber and insulation. It also provides sweetener products comprising glucose syrups, high maltose syrup, high fructose corn syrup, dextrose, polyols, maltodextrin, glucose syrup solids, and non-genetically modified organism syrups for applications in food and beverage products, such as baked goods, snack foods, canned fruits, condiments, candy and other sweets, dairy products, ice cream, jams and jellies, prepared mixes, table syrups, and beverages. In addition, the company sells refined corn oil, corn gluten feed, and corn gluten meal; and other products, including fruit and vegetable products, such as concentrates, purees, and essences, as well as pulse proteins and hydrocolloids systems and blends. The company was formerly known as Corn Products International, Inc. and changed its name to Ingredion Incorporated in June 2012. Ingredion Incorporated was founded in 1906 and is headquartered in Westchester, Illinois.