McCormick & Company, Incorporated (NYSE:MKC) and TreeHouse Foods (NYSE:THS) are both consumer staples companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, dividends and profitability.
Risk & Volatility
McCormick & Company, Incorporated has a beta of 0.44, suggesting that its share price is 56% less volatile than the S&P 500. Comparatively, TreeHouse Foods has a beta of 0.61, suggesting that its share price is 39% less volatile than the S&P 500.
Analyst Ratings
This is a summary of recent recommendations for McCormick & Company, Incorporated and TreeHouse Foods, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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McCormick & Company, Incorporated | 2 | 4 | 3 | 0 | 2.11 |
TreeHouse Foods | 0 | 7 | 4 | 0 | 2.36 |
McCormick & Company, Incorporated currently has a consensus price target of $81.5556, indicating a potential downside of 3.40%. TreeHouse Foods has a consensus price target of $52.7778, indicating a potential downside of 0.77%. Given TreeHouse Foods' stronger consensus rating and higher probable upside, analysts plainly believe TreeHouse Foods is more favorable than McCormick & Company, Incorporated.
Institutional and Insider Ownership
37.5% of McCormick & Company, Incorporated shares are held by institutional investors. 11.0% of McCormick & Company, Incorporated shares are held by insiders. Comparatively, 1.4% of TreeHouse Foods shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Profitability
This table compares McCormick & Company, Incorporated and TreeHouse 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% |
TreeHouse Foods | -0.12% | 8.63% | 2.98% |
Earnings and Valuation
This table compares McCormick & Company, Incorporated and TreeHouse Foods' top-line revenue, earnings per share 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 | 4.21 | $702.70 million | $2.67 | 31.62 |
TreeHouse Foods | $4.29 billion | 0.69 | $-361,000,000.00 | $2.39 | 22.26 |
McCormick & Company, Incorporated has higher revenue and earnings than TreeHouse Foods. TreeHouse 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.
Summary
McCormick & Company, Incorporated beats TreeHouse Foods on 10 of the 14 factors compared between the two stocks.