Head-To-Head Review: Darling Ingredients (NYSE:DAR) & Flowers Foods (NYSE:FLO)

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

Earnings and Valuation

This table compares Flowers Foods and Darling Ingredients”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Flowers Foods	$5.10 billion	0.49	$248.12 million	$0.92	12.83
Darling Ingredients	$5.72 billion	1.35	$278.88 million	$0.67	72.66

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Flowers Foods	3.78%	16.35%	5.65%
Darling Ingredients	1.84%	2.39%	1.08%

Volatility and Risk

Flowers Foods has a beta of 0.33, indicating that its stock price is 67% less volatile than the S&P 500. Comparatively, Darling Ingredients has a beta of 1.27, indicating that its stock price is 27% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Flowers Foods and Darling Ingredients, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Flowers Foods	1	4	0	0	1.80
Darling Ingredients	1	1	8	1	2.82

Flowers Foods currently has a consensus price target of $13.67, suggesting a potential upside of 15.82%. Darling Ingredients has a consensus price target of $48.88, suggesting a potential upside of 0.40%. Given Flowers Foods’ higher probable upside, research analysts clearly believe Flowers Foods is more favorable than Darling Ingredients.

Institutional and Insider Ownership

75.5% of Flowers Foods shares are owned by institutional investors. Comparatively, 94.4% of Darling Ingredients shares are owned by institutional investors. 11.6% of Flowers Foods shares are owned by insiders. Comparatively, 2.1% of Darling Ingredients shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Darling Ingredients beats Flowers Foods on 9 of the 15 factors compared between the two stocks.

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.

About Darling Ingredients

Darling Ingredients Inc. develops, produces, and sells natural ingredients from edible and inedible bio-nutrients in North America, Europe, China, South America, and internationally. The company operates through three segments: Feed Ingredients, Food Ingredients, and Fuel Ingredients. It offers ingredients and customized specialty solutions for customers in the pharmaceutical, food, pet food, feed, industrial, fuel, bioenergy, and fertilizer industries. The company also collects and transforms various animal by-product streams into useable and specialty ingredients, such as collagen, edible fats, feed-grade fats, animal proteins and meals, plasma, pet food ingredients, organic fertilizers, yellow grease, fuel feedstock, green energy, natural casings, and hides. In addition, it recovers and converts used cooking oil and animal fats, and residual bakery products into valuable feed and fuel ingredients. Further, the company provides environmental services, including grease trap collection and disposal services to food service establishments. It primarily operates under the Rendac, Sonac, FASA, Ecoson, Rousselot, Gelnex, and CTH brand names. The company was formerly known as Darling International Inc. and changed its name to Darling Ingredients Inc. in May 2014. Darling Ingredients Inc. was founded in 1882 and is headquartered in Irving, Texas.