Pilgrim’s Pride (NASDAQ:PPC) & Ajinomoto (OTCMKTS:AJINY) Critical Review

Ajinomoto (OTCMKTS:AJINY) and Pilgrim’s Pride (NASDAQ:PPC) are both consumer staples companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.

Institutional and Insider Ownership

16.6% of Pilgrim’s Pride shares are owned by institutional investors. 82.2% of Pilgrim’s Pride shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Ajinomoto has a beta of 0.5, meaning that its share price is 50% less volatile than the S&P 500. Comparatively, Pilgrim’s Pride has a beta of 0.27, meaning that its share price is 73% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for Ajinomoto and Pilgrim’s Pride, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ajinomoto	0	1	0	0	2.00
Pilgrim’s Pride	1	5	2	0	2.12

Pilgrim’s Pride has a consensus target price of $36.50, suggesting a potential upside of 31.20%. Given Pilgrim’s Pride’s stronger consensus rating and higher possible upside, analysts clearly believe Pilgrim’s Pride is more favorable than Ajinomoto.

Profitability

This table compares Ajinomoto and Pilgrim’s Pride’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ajinomoto	N/A	N/A	N/A
Pilgrim’s Pride	2.96%	21.70%	7.90%

Valuation & Earnings

This table compares Ajinomoto and Pilgrim’s Pride”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ajinomoto	$10.05 billion	2.72	$463.80 million	$0.83	33.69
Pilgrim’s Pride	$18.50 billion	0.36	$1.08 billion	$2.30	12.10

Pilgrim’s Pride has higher revenue and earnings than Ajinomoto. Pilgrim’s Pride is trading at a lower price-to-earnings ratio than Ajinomoto, indicating that it is currently the more affordable of the two stocks.

Summary

Pilgrim’s Pride beats Ajinomoto on 11 of the 14 factors compared between the two stocks.

About Ajinomoto

Ajinomoto Co., Inc. engages in the seasonings and foods, frozen foods, and healthcare and other businesses in Japan and internationally. The Seasonings and Foods segment offers sauces and seasoning products under the AJI-NO-MOTO, HON-DASHI, Cook Do, Ajinomoto KK Consommé, Pure Select Mayonnaise, Ros Dee, Masako, Aji-ngon, Sazón, Sajiku, and CRISPY FRY names; and solutions and ingredients for foodservice and processed food manufacturers, processed foods, and restaurants, as well as industrial, retail, and other applications. This segment also provides instant noodles under the Knorr Cup Soup and YumYum names; coffee beverages under the Birdy and Blendy brands; powdered drink under the Birdy 3in1 name; MAXIM brand products; Chyotto Zeitakuna Kohiten brand products; and gift sets and office supplies comprising coffee vending machines, tea servers, etc. The Frozen Foods segment offers Chinese dumplings, cooked rice, noodles, desserts, shumai, processed chicken, and other products under the AJINOMOTO FRESH FROZEN, Bernardi, FRED’S, Golden Tiger, José Olé, LingLing, POSADA, and TAI PEI brands. The Healthcare and Other segment provides amino acids for applications in various industries, such as pharmaceuticals and foods; contract development and manufacturing services for pharmaceutical intermediates and active ingredients, aseptic fill finish services, etc.; personal care ingredients; and medical foods, crop services, etc. This segment also offers Ajinomoto Build-up Film, an interlayer insulating material for semiconductor packages; fundamental foods under the Glyna and Amino Aile names; sports nutrition supplements under the amino VITAL brand; and functional materials, such as activated carbon, release paper, etc. Ajinomoto Co., Inc. was founded in 1909 and is headquartered in Tokyo, Japan.

About Pilgrim’s Pride

Pilgrim’s Pride Corp. engages in the production, processing, marketing, and distribution of fresh, frozen and value-added chicken and pork products to retailers, distributors, and foodservice operators. It operates through the following segments: U.S., U.K. and Europe, and Mexico. The company was founded by Lonnie A. Pilgrim and Aubrey Pilgrim on October 2, 1946, and is headquartered in Greeley, CO.