Reviewing Nomad Foods (NYSE:NOMD) and Ingredion (NYSE:INGR)

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

Analyst Recommendations

This is a summary of current recommendations for Nomad Foods and Ingredion, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nomad Foods	0	0	3	0	3.00
Ingredion	0	3	2	0	2.40

Nomad Foods presently has a consensus price target of $22.00, indicating a potential upside of 43.80%. Ingredion has a consensus price target of $151.40, indicating a potential upside of 20.93%. Given Nomad Foods’ stronger consensus rating and higher possible upside, research analysts plainly believe Nomad Foods is more favorable than Ingredion.

Institutional and Insider Ownership

75.3% of Nomad Foods shares are owned by institutional investors. Comparatively, 85.3% of Ingredion shares are owned by institutional investors. 17.3% of Nomad Foods shares are owned by insiders. Comparatively, 2.3% of Ingredion shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Nomad Foods and Ingredion”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nomad Foods	$3.35 billion	0.70	$245.74 million	$1.50	10.20
Ingredion	$7.32 billion	1.10	$647.00 million	$10.25	12.21

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Nomad Foods	7.35%	10.60%	4.37%
Ingredion	9.24%	19.04%	10.09%

Dividends

Nomad Foods pays an annual dividend of $0.68 per share and has a dividend yield of 4.4%. Ingredion pays an annual dividend of $3.20 per share and has a dividend yield of 2.6%. Nomad Foods pays out 45.3% of its earnings in the form of a dividend. Ingredion pays out 31.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Nomad Foods has raised its dividend for 2 consecutive years and Ingredion has raised its dividend for 14 consecutive years.

Volatility & Risk

Nomad Foods has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500. Comparatively, Ingredion has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500.

Summary

Ingredion beats Nomad Foods on 11 of the 17 factors compared between the two stocks.

About Nomad Foods

Nomad Foods Limited, together with its subsidiaries, manufactures, markets, and distributes a range of frozen food products in the United Kingdom and internationally. The company offers frozen fish products, including fish fingers, coated fish, and natural fish; ready-to-cook vegetable products, such as peas and spinach; and frozen poultry and meat products comprising nuggets, grills, and burgers. It also provides meal products that include ready-to-cook noodles, pasta, lasagna, pancakes, and other ready-made meals; ice creams, such as in-home and out-of-home ice creams; and other products consisting of soups, pizzas, bakery goods, and meat substitutes. The company sells its products to supermarkets and food retail chains primarily under the Birds Eye, Green Cuisine, iglo, Findus, Aunt Bessie's, Goodfella's, Frikom, Ledo, La Cocinera, and Belviva brand names. Nomad Foods Limited was founded in 2014 and is headquartered in Feltham, the United Kingdom.

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.