Ajinomoto (OTCMKTS:AJINY) and Kraft Heinz (NASDAQ:KHC) Critical Analysis

Ajinomoto (OTCMKTS:AJINY) and Kraft Heinz (NASDAQ:KHC) are both large-cap consumer staples companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, earnings, institutional ownership and dividends.

Earnings and Valuation

This table compares Ajinomoto and Kraft Heinz”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ajinomoto	$10.05 billion	2.72	$463.80 million	$0.83	33.69
Kraft Heinz	$24.94 billion	1.11	-$5.85 billion	($4.86)	-4.79

Ajinomoto has higher earnings, but lower revenue than Kraft Heinz. Kraft Heinz is trading at a lower price-to-earnings ratio than Ajinomoto, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Ajinomoto has a beta of 0.5, suggesting that its stock price is 50% less volatile than the S&P 500. Comparatively, Kraft Heinz has a beta of 0.06, suggesting that its stock price is 94% less volatile than the S&P 500.

Dividends

Ajinomoto pays an annual dividend of $0.18 per share and has a dividend yield of 0.6%. Kraft Heinz pays an annual dividend of $1.60 per share and has a dividend yield of 6.9%. Ajinomoto pays out 21.7% of its earnings in the form of a dividend. Kraft Heinz pays out -32.9% 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. Kraft Heinz is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Ajinomoto and Kraft Heinz, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ajinomoto	0	2	0	1	2.67
Kraft Heinz	4	15	0	1	1.90

Kraft Heinz has a consensus price target of $23.06, suggesting a potential downside of 0.85%. Given Kraft Heinz’s higher possible upside, analysts plainly believe Kraft Heinz is more favorable than Ajinomoto.

Profitability

This table compares Ajinomoto and Kraft Heinz’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ajinomoto	N/A	N/A	N/A
Kraft Heinz	-23.05%	7.26%	3.70%

Institutional & Insider Ownership

78.2% of Kraft Heinz shares are owned by institutional investors. 0.2% of Kraft Heinz shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Kraft Heinz beats Ajinomoto on 8 of the 15 factors compared between the two stocks.

About Ajinomoto

Ajinomoto Co., Inc. engages in the seasonings and foods, frozen foods, and healthcare and other businesses in Japan and internationally. The Seasonings and Foods segment offers sauces and seasoning products under the AJI-NO-MOTO, HON-DASHI, Cook Do, Ajinomoto KK Consommé, Pure Select Mayonnaise, Ros Dee, Masako, Aji-ngon, Sazón, Sajiku, and CRISPY FRY names; and solutions and ingredients for foodservice and processed food manufacturers, processed foods, and restaurants, as well as industrial, retail, and other applications. This segment also provides instant noodles under the Knorr Cup Soup and YumYum names; coffee beverages under the Birdy and Blendy brands; powdered drink under the Birdy 3in1 name; MAXIM brand products; Chyotto Zeitakuna Kohiten brand products; and gift sets and office supplies comprising coffee vending machines, tea servers, etc. The Frozen Foods segment offers Chinese dumplings, cooked rice, noodles, desserts, shumai, processed chicken, and other products under the AJINOMOTO FRESH FROZEN, Bernardi, FRED’S, Golden Tiger, José Olé, LingLing, POSADA, and TAI PEI brands. The Healthcare and Other segment provides amino acids for applications in various industries, such as pharmaceuticals and foods; contract development and manufacturing services for pharmaceutical intermediates and active ingredients, aseptic fill finish services, etc.; personal care ingredients; and medical foods, crop services, etc. This segment also offers Ajinomoto Build-up Film, an interlayer insulating material for semiconductor packages; fundamental foods under the Glyna and Amino Aile names; sports nutrition supplements under the amino VITAL brand; and functional materials, such as activated carbon, release paper, etc. Ajinomoto Co., Inc. was founded in 1909 and is headquartered in Tokyo, Japan.

About Kraft Heinz

The Kraft Heinz Company, together with its subsidiaries, manufactures and markets food and beverage products in North America and internationally. Its products include condiments and sauces, cheese and dairy products, meals, meats, refreshment beverages, coffee, and other grocery products under the Kraft, Oscar Mayer, Heinz, Philadelphia, Lunchables, Velveeta, Ore-Ida, Maxwell House, Kool-Aid, Jell-O, Heinz, ABC, Master, Quero, Kraft, Golden Circle, Wattie's, Pudliszki, and Plasmon brands. It sells its products through its own sales organizations, as well as through independent brokers, agents, and distributors to chain, wholesale, cooperative, and independent grocery accounts; convenience, value, and club stores; pharmacies and drug stores; mass merchants; foodservice distributors; institutions, including hotels, restaurants, bakeries, hospitals, health care facilities, and government agencies; and online through various e-commerce platforms and retailers. The company was formerly known as H.J. Heinz Holding Corporation and changed its name to The Kraft Heinz Company in July 2015. The Kraft Heinz Company was founded in 1869 and is based in Pittsburgh, Pennsylvania.