Internationa Flavors & Fragrances (NYSE: IFF) and Lancaster Colony Corporation (NASDAQ:LANC) are both mid-cap basic materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, valuation, earnings, analyst recommendations and dividends.
This table compares Internationa Flavors & Fragrances and Lancaster Colony Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Internationa Flavors & Fragrances||12.31%||26.83%||10.49%|
|Lancaster Colony Corporation||9.82%||23.80%||19.01%|
Institutional & Insider Ownership
84.5% of Internationa Flavors & Fragrances shares are owned by institutional investors. Comparatively, 50.1% of Lancaster Colony Corporation shares are owned by institutional investors. 0.5% of Internationa Flavors & Fragrances shares are owned by insiders. Comparatively, 32.1% of Lancaster Colony Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Internationa Flavors & Fragrances pays an annual dividend of $2.56 per share and has a dividend yield of 1.9%. Lancaster Colony Corporation pays an annual dividend of $2.20 per share and has a dividend yield of 1.8%. Internationa Flavors & Fragrances pays out 51.7% of its earnings in the form of a dividend. Lancaster Colony Corporation pays out 51.3% 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. Internationa Flavors & Fragrances has increased its dividend for 54 consecutive years and Lancaster Colony Corporation has increased its dividend for 7 consecutive years. Internationa Flavors & Fragrances is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation and Earnings
This table compares Internationa Flavors & Fragrances and Lancaster Colony Corporation’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Internationa Flavors & Fragrances||$3.21 billion||3.33||$671.23 million||$4.95||27.35|
|Lancaster Colony Corporation||$1.20 billion||2.82||$221.45 million||$4.29||28.70|
Internationa Flavors & Fragrances has higher revenue and earnings than Lancaster Colony Corporation. Internationa Flavors & Fragrances is trading at a lower price-to-earnings ratio than Lancaster Colony Corporation, indicating that it is currently the more affordable of the two stocks.
This is a summary of current recommendations for Internationa Flavors & Fragrances and Lancaster Colony Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Internationa Flavors & Fragrances||1||10||4||0||2.20|
|Lancaster Colony Corporation||0||1||4||0||2.80|
Internationa Flavors & Fragrances currently has a consensus target price of $140.08, indicating a potential upside of 3.47%. Lancaster Colony Corporation has a consensus target price of $154.67, indicating a potential upside of 25.63%. Given Lancaster Colony Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe Lancaster Colony Corporation is more favorable than Internationa Flavors & Fragrances.
Risk and Volatility
Internationa Flavors & Fragrances has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500. Comparatively, Lancaster Colony Corporation has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500.
Internationa Flavors & Fragrances beats Lancaster Colony Corporation on 10 of the 16 factors compared between the two stocks.
Internationa Flavors & Fragrances Company Profile
International Flavors & Fragrances Inc. creates, manufactures and supplies flavors and fragrances (including cosmetic active ingredients) used to impart or improve flavor or fragrance in a range of consumer products. The Company operates in two segments: Flavors and Fragrances. The Flavors segment offers flavor compounds that are sold to the food and beverage industries for use in consumer products, such as prepared foods, beverages, dairy, food and sweet products. The Fragrances segment offers fragrance compounds and fragrance ingredients. Its cosmetic active ingredients consist of active and functional ingredients, botanicals and delivery systems to support its customers’ cosmetic and personal care product lines. Its products are sold to manufacturers of perfumes and cosmetics, hair and other personal care products, soaps and detergents, meat and other processed foods, beverages, snacks and savory foods, sweet and baked goods, and pharmaceutical and oral care products, among others.
Lancaster Colony Corporation Company Profile
Lancaster Colony Corporation is a manufacturer and marketer of specialty food products for the retail and foodservice channels. The Company’s food products include Salad dressings and sauces, Vegetable dips and fruit dips, Frozen garlic breads, Frozen Parkerhouse style yeast rolls and dinner rolls, Premium dry egg noodles, Frozen specialty noodles, Croutons and salad toppings, Flatbread wraps and pizza crusts, and Caviar. Its brands include Marzetti, Marzetti Simply Dressed, Cardini’s, Girard’s, Katherine’s Kitchen, New York BRAND Bakery, Mamma Bella’s, Sister Schubert’s, Mary B’s, Inn Maid, Amish Kitchen, Reames, Aunt Vi’s, Flatout and Romanoff. It manufactures and sells other products pursuant to brand license agreements, including Olive Garden dressing, Jack Daniel’s mustards and Hungry Girl flatbreads. A portion of its sales are dressing packets, frozen specialty noodles, pasta and flatbreads sold to industrial customers for use as ingredients or components in their products.
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