SunOpta (STKL) and McCormick & Company, (MKC) Critical Contrast

SunOpta (NASDAQ: STKL) and McCormick & Company, (NYSE:MKC) are both consumer staples companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, earnings, valuation, institutional ownership, risk, profitability and analyst recommendations.

Risk and Volatility

SunOpta has a beta of 1.75, indicating that its share price is 75% more volatile than the S&P 500. Comparatively, McCormick & Company, has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500.

Profitability

This table compares SunOpta and McCormick & Company,’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SunOpta -3.70% -0.70% -0.23%
McCormick & Company, 10.05% 26.09% 8.17%

Insider and Institutional Ownership

81.9% of SunOpta shares are held by institutional investors. Comparatively, 72.7% of McCormick & Company, shares are held by institutional investors. 1.9% of SunOpta shares are held by company insiders. Comparatively, 15.3% of McCormick & Company, shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares SunOpta and McCormick & Company,’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
SunOpta $1.31 billion 0.61 $70.04 million ($0.64) -14.45
McCormick & Company, $4.48 billion 2.61 $776.80 million $3.62 26.92

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

Dividends

McCormick & Company, pays an annual dividend of $1.88 per share and has a dividend yield of 1.9%. SunOpta does not pay a dividend. McCormick & Company, pays out 51.9% of its earnings in the form of a dividend. McCormick & Company, has increased its dividend for 30 consecutive years.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for SunOpta and McCormick & Company,, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SunOpta 0 2 3 0 2.60
McCormick & Company, 0 6 4 0 2.40

SunOpta presently has a consensus price target of $8.88, suggesting a potential downside of 4.05%. McCormick & Company, has a consensus price target of $104.56, suggesting a potential upside of 7.29%. Given McCormick & Company,’s higher possible upside, analysts clearly believe McCormick & Company, is more favorable than SunOpta.

Summary

McCormick & Company, beats SunOpta on 12 of the 16 factors compared between the two stocks.

About SunOpta

Sunopta Inc is a Canada-based company, which operates businesses focused on a healthy products portfolio. It operates through the following segments: Global Ingredients and Consumer Products. The Global Ingredients segment aggregates its North American and international raw material sourcing and supply operating segments focused on the procurement, processing and sale of specialty and organic grains, seeds, fruits, grain- and cocoa-based ingredients, and other commodities. The Consumer Products segment provides healthy and organic food products that are consumer-packaged to retailers, foodservice distributors and food manufacturers with a range of branded and private label products. It is focused on sourcing non-genetically modified (non-GMO) and organic ingredients, and manufacturing healthy food and beverage products. It manufactures packaged products focused on the healthy beverage, healthy fruit and healthy snack categories.

About McCormick & Company,

McCormick & Company, Incorporated is engaged in manufacturing, marketing and distributing spices, seasoning mixes, condiments and other flavorful products to the food industry, including retailers, food manufacturers and foodservice businesses. The Company’s segments include consumer and industrial. The Company is involved in the manufacturing and sales of flavorful products. As of November 30, 2016, it offered brands for consumers in approximately 150 countries and territories. The Company’s brands in the Americas include McCormick, Lawry’s, and Club House, as well as brands, such as Gourmet Garden and OLD BAY. It provides a range of products to food manufacturers and foodservice customers. The Company’s sales, distribution and production facilities are located in North America, Europe and China. It markets regional and ethnic brands, such as Zatarain’s, Stubb’s, Thai Kitchen and Simply Asia. The Company offers sensory testing, culinary research, food safety and flavor application.

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