McCormick & Company, Incorporated (NYSE:MKC) and Flowers Foods (NYSE:FLO) are both consumer staples companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, earnings, profitability and valuation.
Dividends
McCormick & Company, Incorporated pays an annual dividend of $1.36 per share and has a dividend yield of 1.5%. Flowers Foods pays an annual dividend of $0.80 per share and has a dividend yield of 3.6%. McCormick & Company, Incorporated pays out 50.9% of its earnings in the form of a dividend. Flowers Foods pays out 83.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Flowers Foods has raised its dividend for 6 consecutive years. Flowers Foods is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk & Volatility
McCormick & Company, Incorporated has a beta of 0.44, indicating that its stock price is 56% less volatile than the S&P 500. Comparatively, Flowers Foods has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500.
Analyst Ratings
This is a summary of recent ratings and price targets for McCormick & Company, Incorporated and Flowers Foods, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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McCormick & Company, Incorporated | 2 | 4 | 3 | 0 | 2.11 |
Flowers Foods | 0 | 3 | 0 | 0 | 2.00 |
McCormick & Company, Incorporated currently has a consensus target price of $81.5556, suggesting a potential downside of 12.71%. Flowers Foods has a consensus target price of $23.6667, suggesting a potential upside of 5.89%. Given Flowers Foods' higher possible upside, analysts clearly believe Flowers Foods is more favorable than McCormick & Company, Incorporated.
Institutional & Insider Ownership
37.5% of McCormick & Company, Incorporated shares are held by institutional investors. Comparatively, 64.5% of Flowers Foods shares are held by institutional investors. 12.7% of McCormick & Company, Incorporated shares are held by insiders. Comparatively, 8.2% of Flowers Foods 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.
Earnings & Valuation
This table compares McCormick & Company, Incorporated and Flowers Foods' revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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McCormick & Company, Incorporated | $5.35 billion | 4.66 | $702.70 million | $2.67 | 34.99 |
Flowers Foods | $4.12 billion | 1.15 | $164.54 million | $0.96 | 23.28 |
McCormick & Company, Incorporated has higher revenue and earnings than Flowers Foods. Flowers Foods is trading at a lower price-to-earnings ratio than McCormick & Company, Incorporated, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares McCormick & Company, Incorporated and Flowers Foods' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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McCormick & Company, Incorporated | 13.75% | 20.93% | 7.24% |
Flowers Foods | 2.30% | 19.41% | 7.65% |
Summary
McCormick & Company, Incorporated beats Flowers Foods on 11 of the 17 factors compared between the two stocks.