Darling Ingredients (NYSE:DAR) & Mondelez International (MDLZ) Critical Analysis

Mondelez International (NASDAQ: MDLZ) and Darling Ingredients (NYSE:DAR) are both mid-cap consumer staples companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.

Insider & Institutional Ownership

75.8% of Mondelez International shares are owned by institutional investors. Comparatively, 97.8% of Darling Ingredients shares are owned by institutional investors. 3.6% of Mondelez International shares are owned by company insiders. Comparatively, 2.0% of Darling Ingredients shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Mondelez International and Darling Ingredients’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mondelez International $25.92 billion 2.45 $1.66 billion $1.44 29.49
Darling Ingredients $3.40 billion 0.93 $102.31 million $0.39 49.10

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

Dividends

Mondelez International pays an annual dividend of $0.88 per share and has a dividend yield of 2.1%. Darling Ingredients does not pay a dividend. Mondelez International pays out 61.1% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of current ratings and target prices for Mondelez International and Darling Ingredients, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mondelez International 0 2 9 1 2.92
Darling Ingredients 0 1 4 0 2.80

Mondelez International presently has a consensus price target of $49.58, indicating a potential upside of 16.75%. Darling Ingredients has a consensus price target of $19.40, indicating a potential upside of 1.31%. Given Mondelez International’s stronger consensus rating and higher probable upside, equities analysts clearly believe Mondelez International is more favorable than Darling Ingredients.

Profitability

This table compares Mondelez International and Darling Ingredients’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mondelez International 8.61% 12.31% 5.07%
Darling Ingredients 1.76% 2.96% 1.32%

Volatility & Risk

Mondelez International has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500. Comparatively, Darling Ingredients has a beta of 1.52, suggesting that its share price is 52% more volatile than the S&P 500.

Summary

Mondelez International beats Darling Ingredients on 13 of the 17 factors compared between the two stocks.

Mondelez International Company Profile

Mondelez International, Inc. is a snack company. The Company manufactures and markets snack food and beverage products for consumers. It operates through four segments: Latin America, Asia, Middle East, and Africa (AMEA), Europe and North America. As of December 31, 2016, its brands spanned five product categories: Biscuits (including cookies, crackers and salted snacks); Chocolate; Gum and candy; Beverages (including coffee and powdered beverages), and Cheese and grocery. Itsportfolio includes various snack brands, including Nabisco, Oreo, LU and belVita biscuits; Cadbury, Milka, Cadbury Dairy Milk and Toblerone chocolate; Trident gum; Halls candy, and Tang powdered beverages. The Company sells its products to supermarket chains, wholesalers, supercenters, club stores, mass merchandisers, distributors, convenience stores, gasoline stations, drug stores, value stores and retail food outlets. As of December 31, 2016, it sold its products to consumers in approximately 165 countries.

Darling Ingredients Company Profile

Darling Ingredients Inc. (Darling) is a developer and producer of sustainable natural ingredients from edible and inedible bio-nutrients, creating a range of ingredients and customized specialty solutions for customers in the pharmaceutical, food, pet food, feed, industrial, fuel, bioenergy and fertilizer industries. The Company operates through three segments: Feed Ingredients, Food Ingredients and Fuel Ingredients. The Company collects and transforms all aspects of animal by-product streams into useable and specialty ingredients, such as gelatin, edible fats, feed-grade fats, animal proteins and meals, plasma, pet food ingredients, organic fertilizers, yellow grease, fuel feedstocks, green energy, natural casings and hides. In addition, the Company provides grease trap services to food service establishments, environmental services to food processors and sells restaurant cooking oil delivery and collection equipment.

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