Analyzing Ingredion (NYSE:INGR) & Flowers Foods (NYSE:FLO)

Ingredion (NYSE:INGR) and Flowers Foods (NYSE:FLO) are both mid-cap consumer staples companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, profitability, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Ingredion and Flowers Foods, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ingredion	1	5	1	0	2.00
Flowers Foods	1	3	0	0	1.75

Ingredion currently has a consensus target price of $124.33, indicating a potential upside of 15.41%. Flowers Foods has a consensus target price of $13.67, indicating a potential upside of 26.37%. Given Flowers Foods’ higher probable upside, analysts clearly believe Flowers Foods is more favorable than Ingredion.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ingredion	$7.26 billion	0.94	$647.00 million	$10.03	10.74
Flowers Foods	$5.13 billion	0.44	$248.12 million	$0.92	11.76

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

Risk and Volatility

Ingredion has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500. Comparatively, Flowers Foods has a beta of 0.26, meaning that its stock price is 74% less volatile than the S&P 500.

Profitability

This table compares Ingredion and Flowers Foods’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ingredion	9.24%	19.04%	10.09%
Flowers Foods	4.30%	17.85%	6.52%

Insider & Institutional Ownership

85.3% of Ingredion shares are owned by institutional investors. Comparatively, 75.4% of Flowers Foods shares are owned by institutional investors. 2.3% of Ingredion shares are owned by insiders. Comparatively, 11.6% of Flowers Foods shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Ingredion pays an annual dividend of $3.28 per share and has a dividend yield of 3.0%. Flowers Foods pays an annual dividend of $0.99 per share and has a dividend yield of 9.2%. Ingredion pays out 32.7% of its earnings in the form of a dividend. Flowers Foods pays out 107.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ingredion has increased its dividend for 14 consecutive years and Flowers Foods has increased its dividend for 24 consecutive years. Flowers Foods is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Ingredion beats Flowers Foods on 13 of the 17 factors compared between the two stocks.

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.

About Flowers Foods

Flowers Foods, Inc. produces and markets packaged bakery food products in the United States. Its principal products include fresh breads, buns, rolls, snack items, bagels, English muffins, and tortillas, as well as frozen breads and rolls under the Nature's Own, Dave's Killer Bread, Wonder, Canyon Bakehouse, Mrs. Freshley's, and Tastykake brand names. The company distributes its products through a direct-store-delivery distribution and a warehouse delivery system, as well as operates bakeries. Its customers include national and regional restaurants, institutions and foodservice distributors, and retail in-store bakeries; wholesale distributors; mass merchandisers, supermarkets, vending outlets, and convenience stores; quick-serve chains, food wholesalers, institutions, dollar stores, and vending companies; and public health care, military commissaries, and prisons, and other governmental institutions. The company was formerly known as Flowers Industries and changed its name to Flowers Foods, Inc. in 2001. Flowers Foods, Inc. was founded in 1919 and is headquartered in Thomasville, Georgia.