Head-To-Head Analysis: McCormick & Company, Incorporated (NYSE:MKC) vs. Flowers Foods (NYSE:FLO)

McCormick & Company, Incorporated (NYSE:MKC) and Flowers Foods (NYSE:FLO) are both consumer staples companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Insider & Institutional Ownership

79.7% of McCormick & Company, Incorporated shares are owned by institutional investors. Comparatively, 75.5% of Flowers Foods shares are owned by institutional investors. 10.6% of McCormick & Company, Incorporated shares are owned by company insiders. Comparatively, 7.2% of Flowers Foods shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings for McCormick & Company, Incorporated and Flowers Foods, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
McCormick & Company, Incorporated	0	8	5	0	2.38
Flowers Foods	3	4	0	0	1.57

McCormick & Company, Incorporated currently has a consensus price target of $55.30, suggesting a potential upside of 15.40%. Flowers Foods has a consensus price target of $6.70, suggesting a potential upside of 4.61%. Given McCormick & Company, Incorporated’s stronger consensus rating and higher probable upside, equities analysts clearly believe McCormick & Company, Incorporated is more favorable than Flowers Foods.

Earnings and Valuation

This table compares McCormick & Company, Incorporated and Flowers Foods”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
McCormick & Company, Incorporated	$6.84 billion	1.88	$789.40 million	$5.53	8.67
Flowers Foods	$5.26 billion	0.26	$83.82 million	$0.26	24.63

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

Dividends

McCormick & Company, Incorporated pays an annual dividend of $1.92 per share and has a dividend yield of 4.0%. Flowers Foods pays an annual dividend of $0.50 per share and has a dividend yield of 7.8%. McCormick & Company, Incorporated pays out 34.7% of its earnings in the form of a dividend. Flowers Foods pays out 192.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. McCormick & Company, Incorporated has increased its dividend for 38 consecutive years and Flowers Foods has increased its dividend for 24 consecutive years.

Volatility and Risk

McCormick & Company, Incorporated has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500. Comparatively, Flowers Foods has a beta of 0.38, meaning that its stock price is 62% less volatile than the S&P 500.

Profitability

This table compares McCormick & Company, Incorporated and Flowers Foods’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
McCormick & Company, Incorporated	19.39%	12.01%	5.46%
Flowers Foods	1.06%	14.91%	4.72%

Summary

McCormick & Company, Incorporated beats Flowers Foods on 14 of the 17 factors compared between the two stocks.

About McCormick & Company, Incorporated

McCormick & Co., Inc. engages in the manufacturing, marketing, and distribution of spices, seasoning mixes, condiments, and other flavorful products to retail outlets, food manufacturers, and foodservice businesses. It operates through the Consumer and Flavor Solutions segments. The Consumer segment sells spices, seasonings, condiments, and sauces. The Flavor Solutions segment includes seasoning blends, spices and herbs, condiments, coating systems, and compound flavors. The company was founded by Willoughby M. McCormick in 1889 and is headquartered in Baltimore, MD.

About Flowers Foods

Flowers Foods, Inc. produces and markets packaged bakery food products in the United States. Its principal products include fresh breads, buns, rolls, snack items, bagels, English muffins, and tortillas, as well as frozen breads and rolls under the Nature's Own, Dave's Killer Bread, Wonder, Canyon Bakehouse, Mrs. Freshley's, and Tastykake brand names. The company distributes its products through a direct-store-delivery distribution and a warehouse delivery system, as well as operates bakeries. Its customers include national and regional restaurants, institutions and foodservice distributors, and retail in-store bakeries; wholesale distributors; mass merchandisers, supermarkets, vending outlets, and convenience stores; quick-serve chains, food wholesalers, institutions, dollar stores, and vending companies; and public health care, military commissaries, and prisons, and other governmental institutions. The company was formerly known as Flowers Industries and changed its name to Flowers Foods, Inc. in 2001. Flowers Foods, Inc. was founded in 1919 and is headquartered in Thomasville, Georgia.