Ingredion Incorporated (INGR): Zacks Rank Buy
Ingredion Incorporated (INGR) reached an all-time high of $60.97 after posting solid third quarter results, which included a positive EPS surprise, a raised outlook for the full year and an increased dividend. Earnings momentum has also advanced since the report. With a year-to-date return of about 20%, this Zacks #1 Rank (Strong Buy) provider of ingredients solutions is showing strong momentum.
Driving Catalysts
On October 25, 2012, Ingredion Incorporated announced third quarter earnings per share of $1.52, beating the Zacks Consensus Estimate by 17% and last year's result by 27%.
Net sales increased 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 in the quarter standing at 10%.
Ingredion Incorporated now expects adjusted earnings per share between $5.47 and $5.57 for the full year, versus the earlier projection of $5.00 to $5.25.
The company also has a consistent policy of regular dividend payments along with increases at regular intervals since 1998. Most recently, it announced an increase of 30% in the quarter's dividend rate.
Earnings Momentum Moves Higher
Over the last 7 days, the Zacks Consensus Estimate for 2012 moved higher by 5.7% to $5.52. The Zacks Consensus Estimate for 2013 went up 2.7% to $5.76. These estimates reflect year-over-year growth of 18.0% for 2012 and 4.2% for 2013.
Valuation & Technicals
Ingredion Incorporated is currently trading at a forward P/E multiple of 11.0, a 26.5% discount from its peer group average of 15.0. On a P/S basis, shares trade at 0.7x, versus the peer group average of 0.8x. The company offers a ROE of 17.8%, much higher than the peer group average of 11.7%.
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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