Analyzing Kellogg (K) and The Competition

Kellogg (NYSE: K) is one of 50 public companies in the “Food Processing” industry, but how does it contrast to its competitors? We will compare Kellogg to similar companies based on the strength of its earnings, valuation, profitability, risk, dividends, institutional ownership and analyst recommendations.

Dividends

Kellogg pays an annual dividend of $2.16 per share and has a dividend yield of 3.5%. Kellogg pays out 97.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Food Processing” companies pay a dividend yield of 2.6% and pay out 60.1% of their earnings in the form of a dividend. Kellogg has increased its dividend for 12 consecutive years.

Profitability

This table compares Kellogg and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kellogg 6.12% 70.22% 9.15%
Kellogg Competitors 4.08% 11.36% 4.77%

Analyst Recommendations

This is a summary of current recommendations and price targets for Kellogg and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kellogg 2 7 1 0 1.90
Kellogg Competitors 264 1500 1854 53 2.46

Kellogg currently has a consensus target price of $73.90, suggesting a potential upside of 21.07%. As a group, “Food Processing” companies have a potential downside of 1.79%. Given Kellogg’s higher possible upside, equities analysts clearly believe Kellogg is more favorable than its competitors.

Insider & Institutional Ownership

85.4% of Kellogg shares are owned by institutional investors. Comparatively, 63.6% of shares of all “Food Processing” companies are owned by institutional investors. 1.3% of Kellogg shares are owned by insiders. Comparatively, 12.2% of shares of all “Food Processing” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Kellogg and its competitors gross revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Kellogg $12.79 billion $2.27 billion 27.62
Kellogg Competitors $8.38 billion $1.05 billion 22.19

Kellogg has higher revenue and earnings than its competitors. Kellogg is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Risk & Volatility

Kellogg has a beta of 0.48, suggesting that its stock price is 52% less volatile than the S&P 500. Comparatively, Kellogg’s competitors have a beta of 0.72, suggesting that their average stock price is 28% less volatile than the S&P 500.

Summary

Kellogg beats its competitors on 8 of the 15 factors compared.

Kellogg Company Profile

Kellogg Company is a manufacturer and marketer of ready-to-eat cereal and convenience foods. The Company’s principal products are ready-to-eat cereals and convenience foods, such as cookies, crackers, savory snacks, toaster pastries, cereal bars, fruit-flavored snacks, frozen waffles and veggie foods. Its segments include U.S. Morning Foods, which includes cereal, toaster pastries, health and wellness bars, and beverages; U.S. Snacks, which includes cookies, crackers, cereal bars, savory snacks and fruit-flavored snacks; U.S. Specialty, which represents food away from home channels, including food service, convenience, vending, Girl Scouts and food manufacturing; North America Other, which includes the U.S. Frozen, Kashi and Canada operating segments; Europe, which consists of European countries; Latin America, which consists of Central and South America and includes Mexico, and Asia Pacific, which consists of Sub-Saharan Africa, Australia and other Asian and Pacific markets.

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