Analyzing Ajinomoto (OTCMKTS:AJINY) and Marzetti (NASDAQ:MZTI)

Ajinomoto (OTCMKTS:AJINY) and Marzetti (NASDAQ:MZTI) are both consumer staples companies, but which is the better business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, institutional ownership, profitability, dividends and earnings.

Insider & Institutional Ownership

66.4% of Marzetti shares are held by institutional investors. 29.5% of Marzetti shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Ajinomoto and Marzetti”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ajinomoto	$10.05 billion	2.70	$463.80 million	$0.60	45.39
Marzetti	$1.87 billion	2.63	$158.61 million	$6.15	29.00

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

Dividends

Ajinomoto pays an annual dividend of $0.19 per share and has a dividend yield of 0.7%. Marzetti pays an annual dividend of $3.80 per share and has a dividend yield of 2.1%. Ajinomoto pays out 31.7% of its earnings in the form of a dividend. Marzetti pays out 61.8% 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. Marzetti has increased its dividend for 62 consecutive years. Marzetti is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Ajinomoto has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500. Comparatively, Marzetti has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Ajinomoto and Marzetti, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ajinomoto	0	1	0	2	3.33
Marzetti	0	2	2	0	2.50

Marzetti has a consensus price target of $203.50, suggesting a potential upside of 14.12%. Given Marzetti’s higher possible upside, analysts plainly believe Marzetti is more favorable than Ajinomoto.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ajinomoto	6.02%	10.45%	5.06%
Marzetti	8.99%	19.30%	15.03%

Summary

Marzetti beats Ajinomoto on 10 of the 18 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 Marzetti

Lancaster Colony Corporation engages in the manufacturing and marketing of specialty food products for the retail and foodservice channels in the United States. It operates in two segments, Retail and Foodservice. The company offers frozen garlic bread under the New York BRAND Bakery; frozen Parkerhouse style yeast and dinner rolls under the Sister Schubert's brand; salad dressings under the Marzetti, Simply Dressed, Cardini's, and Girard's brands; vegetable and fruit dips under the Marzetti brand; croutons and salad toppings under the New York BRAND Bakery, Chatham Village, and Marzetti brands; and frozen pasta under the Marzetti Frozen Pasta brand. It also manufactures and sells other products to brand license agreements, including Olive Garden dressings, Buffalo Wild Wings sauces, and Chick-fil-A sauces. The company sells its products through sales personnel, food brokers, and distributors to retailers and restaurants. Lancaster Colony Corporation was incorporated in 1961 and is based in Westerville, Ohio.