) touched a new 52-week high of $65.62 on November 27 and has a
year-to-date return of about 30%. This maker of starch and
sweetener ingredients reported a solid third quarter late last
month, including a raised EPS outlook for the full year. In
addition to all this, an attractive price-to-earnings (P/E) ratio
of just 11.8 makes this Zacks #1 Rank (Strong Buy) an attractive
option for value investors.
On October 25, Ingredion Incorporated announced third quarter
earnings per share of $1.52, beating the Zacks Consensus Estimate
by 17% and the year-ago performance by 27%.
Net sales grew 3% to $1.7 billion based on volumes and price
increases. In addition, operational efficiency led to a 19%
increase in operating income with margins standing at 10%.
The company now expects 2012 earnings per share between $5.47 and
$5.57, versus the earlier projection of $5.00 to $5.25.
In its recent analyst meeting, the company outlined its long-term
targets, including a 10%-12% increase in earnings per share,
achieving more that an 8.5% return on capital employed, roughly $8
billion in revenues and operating margin improvement by 100-200
Meanwhile, the company's consistent policy of regular dividend
payments bodes well for the company. Recently, an increase of 30%
in the quarter's dividend rate was announced.
Earnings Estimates Moving Higher
The Zacks Consensus Estimate for 2012 is currently $5.52 per share,
which is up 6% in the past 2 months. The Zacks Consensus Estimate
for 2013 is $5.88 per share, or nearly 5% better in the same time
period. These estimates reflect year-over-year increases of 18.0%
for 2012 and 6.5% for 2013.
Valuation & Technicals
Ingredion Incorporated is currently trading at a forward P/E
multiple of 11.8 versus the peer group average of 15.4. On a P/S
basis, shares trade at 0.8x versus the peer group average of 0.9x.
The P/B of 2.0x is the same as the peer group average. The company
offers a ROE of 17.8%, much higher than the peer group average of
A P/E ratio below 15.0, a P/B ratio under 3.0 and a P/S ratio lower
than 1.0 generally indicate value.
Ingredion Incorporated is headquartered in Westchester, Illinois,
and was incorporated in 1906. The company, formerly known as Corn
Products International, Inc, makes starch and sweetener ingredients
for its customer base in North America, South America, the Asia
Pacific, Europe, the Middle East, and Africa. The company currently
has a market capitalization of approximately $4.6 billion.
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