Comparing Hormel (HRL) & Mitsubishi Chemical (MTLHY)

Hormel (NYSE: HRL) and Mitsubishi Chemical (OTCMKTS:MTLHY) are both large-cap consumer staples companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, dividends and profitability.

Analyst Ratings

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This is a summary of current ratings and recommmendations for Hormel and Mitsubishi Chemical, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hormel 1 4 5 0 2.40
Mitsubishi Chemical 0 0 0 0 N/A

Hormel presently has a consensus price target of $34.33, indicating a potential downside of 1.71%. Given Hormel’s higher possible upside, equities research analysts clearly believe Hormel is more favorable than Mitsubishi Chemical.

Risk and Volatility

Hormel has a beta of 0.44, indicating that its share price is 56% less volatile than the S&P 500. Comparatively, Mitsubishi Chemical has a beta of 1.21, indicating that its share price is 21% more volatile than the S&P 500.

Institutional & Insider Ownership

39.4% of Hormel shares are held by institutional investors. Comparatively, 0.0% of Mitsubishi Chemical shares are held by institutional investors. 3.5% of Hormel shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Hormel pays an annual dividend of $0.75 per share and has a dividend yield of 2.1%. Mitsubishi Chemical pays an annual dividend of $0.48 per share and has a dividend yield of 1.1%. Hormel pays out 47.8% of its earnings in the form of a dividend. Mitsubishi Chemical pays out 10.0% 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. Hormel has raised its dividend for 51 consecutive years. Hormel is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Hormel and Mitsubishi Chemical’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hormel $9.17 billion 2.02 $846.73 million $1.57 22.25
Mitsubishi Chemical $31.23 billion 0.44 $1.45 billion $4.82 9.48

Mitsubishi Chemical has higher revenue and earnings than Hormel. Mitsubishi Chemical is trading at a lower price-to-earnings ratio than Hormel, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Hormel and Mitsubishi Chemical’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hormel 9.92% 17.44% 12.29%
Mitsubishi Chemical N/A N/A N/A

Summary

Hormel beats Mitsubishi Chemical on 11 of the 16 factors compared between the two stocks.

Hormel Company Profile

Hormel Foods Corporation produces and markets various meat and food products in the United States and internationally. The company operates through five segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, Specialty Foods, and International & Other. It offers various perishable meat products, including fresh meats, frozen items, refrigerated meal solutions, sausages, hams, guacamole, and bacon; and shelf-stable products, such as canned luncheon meats, peanut butter, chilies, shelf-stable microwaveable meals, hash, stews, meat spreads, flour and corn tortillas, salsas, tortilla chips, and other products. The company also provides turkey products; nutritional food products and supplements; dessert and drink mixes; and industrial gelatin products. It sells its products through sales personnel, as well as through independent brokers and distributors. The company was formerly known as Geo. A. Hormel & Company and changed its name to Hormel Foods Corporation in January 1995. Hormel Foods Corporation was founded in 1891 and is based in Austin, Minnesota.

Mitsubishi Chemical Company Profile

Mitsubishi Chemical Holdings Corporation engages in the performance products, industrial materials, and health care businesses in Japan and internationally. It operates in five segments: Electronics Applications, Designed Materials, Health Care, Chemicals, and Polymers. The company offers thermoplastic elastomer, phenol and polycarbonate, bio-based engineering plastic, and polybutylene terephthalate products; acrylic and epoxy resins, sugar esters, and resin additives; optical clear adhesive sheets and films, optical polyvinyl alcohol films, color resists, and precision cleaning products; food packaging and acrylic, and sanitary films, as well as moisture-proof polyvinyl chloride sheets for tablet and capsule packaging; and artificial light-type plant growing systems, and fiber reinforced plastic and stainless steel panel water tanks, as well as water treatment components, equipment, and facilities. It also provides engineering plastics, carbon fiber and composite materials, alumina fibers, functional moldings and composites, and fibers and textiles; lithium-ion battery materials, phosphors, and scintillators; ethylene glycols, chemical derivatives, and polyethylene gasoline tanks; coke, carbon black, synthetic rubber, and carbon materials; methyl methacrylate monomers, acrylic molding materials, and acrylic sheets; oxygen, nitrogen, argon, and electronics material gases; and air separation units. In addition, the company offers treatment agents for autoimmune diseases; therapeutic agents for amyotrophic lateral sclerosis; vaccines, compact immunoanalyzers, capsules, diagnostic reagents and instruments, pharmaceutical equipment, and active pharmaceutical ingredients and intermediates; and self-health check services. Further, it provides computer peripheral and polymer processing products; and clinical testing and drug development, logistic and warehouse, and engineering and construction services. The company was founded in 2005 and is headquartered in Tokyo, Japan.

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