Food is fundamental for everyone's nourishment and sustenance, and with time, consumers have realized the importance of ingredients and the quality involved in their food. Consumers are not only focused on what they consume but also on what are the ingredients, how they are procured, and the wastage it involves.
Amid this, Statista projects revenue in the food market to be $9.68 trillion in 2025 and is poised to grow annually by 6.3% (2025-2029). Volume in the market is expected to reach 3,081 billion kg by 2029. Further, more people are leaning towards sustainable practices, healthier food choices, wastage reduction, clean and transparent food, personalized nutrition, and convenience.
Consumers are cautiously assessing products to make better food choices, fueling demand for specialty ingredients. All these factors have contributed to revolutionary changes in the food-maker industry. Companies are increasingly investing and researching specialty food ingredients and offering health-conscious products to meet the growing demand.
Such industry transformation also benefits companies engaged in specialty ingredients operations. They are leveraging innovative technologies and carrying out R&D activities to find new opportunities and drive organic growth. One such company is Ingredion Incorporated (INGR), which stands out with its value-added ingredient solutions and wide reach.
INGR is a leading global ingredient solutions provider and is serving customers across over 120 countries. The company converts plant-based materials into value-added ingredient solutions for the food, beverage, animal nutrition, brewing, and industrial markets. It has a wide range of ingredient products dealing with specific customer needs.
Recently, INGR was named in the 2025 Fortune World's Most Admired Companies list, marking the 15th time the company received this distinguished recognition. Further, the company's Texture & Healthful Solutions segment posted 11% sales volume growth in the last reported quarter. Also, robust growth in all segments drove its double-digit operating profit growth.
INGR’s stock performance is consistent with its efforts. Shares of INGR surged 11% over the past six months and 25.7% over the past year to close the last trading session at $137.36.
Let’s look at factors that could influence INGR’s performance in the upcoming months.
Positive Recent Developments
On November 14, 2024, INGR entered into a new long-term collaboration with Lantmännen, an agricultural cooperative and Northern Europe’s leading player in agriculture, bioenergy, food, and ingredients. The collaboration aims to accelerate the development of high-quality plant-based proteins in the European market.
The strategic partnership will expand INGR’s footprint in the European market and solidify its position as a global leader in the plant-based protein industry. The companies’ combined strengths will allow them to deliver superior, sustainably sourced pea protein isolates that meet the evolving needs of the global market.
Robust Financials
For the third quarter that ended September 30, 2024, INGR reported net sales of $1.87 billion. Its gross profit came in at $479 million, up 13.8% from the prior year’s quarter. The company’s non-GAAP adjusted operating income rose 28.8% from the year-ago value to $282 million.
In addition, non-GAAP adjusted net income attributable to Ingredion came in at $203 million, up 30.1% from the prior-year quarter, while EPS grew 30.9% from the year-ago value to $3.05.
Also, as of September 30, 2024, the company’s cash and cash equivalents stood at $877 million, compared to $401 million as of December 31, 2023.
According to the updated full-year 2024 outlook, INGR expects its adjusted operating income to be up high single digits. The company also projects adjusted EPS in the range of $10.35 to $10.65.
Solid Historical Growth
INGR’s revenue and EBITDA have grown at respective CAGRs of 3.9% and 6.6% over the past three years. The company’s EBIT has increased at a CAGR of 8% over the same timeframe, while its net income and EPS have improved at CAGRs of 60.6% and 61.5%, respectively.
Furthermore, the company’s tangible book value and levered free cash flow have improved at CAGRs of 15% and 111.2% over the past three years, respectively.
Favorable Analyst Estimates
Analysts expect INGR’s revenue for the first quarter (ending March 2025) to increase 1.6% year-over-year to $1.91 billion. The consensus EPS estimate of $2.60 for the same quarter indicates a 25% year-over-year improvement. Moreover, INGR has an impressive earnings surprise history, having topped consensus EPS estimates in each of the trailing four quarters.
For the fiscal year ending December 2025, the company’s revenue and EPS are expected to grow 1.2% and 6.3% year-over-year to $7.58 billion and $11.20, respectively.
High Profitability
INGR’s trailing-12-month EBIT margin of 12.66% is 30% higher than the industry average of 9.74%. Its trailing-12-month net income margin of 9.05% is 112.1% higher than the industry average of 4.27%. Similarly, its trailing-12-month levered FCF margin of 13.22% is significantly higher than the 5.93% industry average.
Furthermore, the stock’s trailing-12-month ROCE, ROTC, and ROTA of 18.68%, 10.27%, and 9.08% favorably compared to the industry averages of 10.64%, 7.16%, and 3.91%, respectively.
Discounted Valuation
In terms of forward non-GAAP P/E, INGR is currently trading at 13.03x, 20.7% lower than the industry average of 16.43x. Also, the stock’s forward EV/Sales and Price/Sales of 1.33x and 1.20x are considerably lower than the industry averages of 1.68x and 1.25x, respectively.
Additionally, the stock’s forward EV/EBITDA and Price/Book of 8.17x and 2.21x are 22.7% and 28% higher than the industry averages of 10.57x and 3.06x, respectively.
POWR Ratings Reflect Promise
INGR’s solid fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, translating to a Strong Buy in our proprietary system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
Our proprietary rating system also evaluates each stock based on eight distinct categories. INGR has a B grade for Value and Quality, which is in sync with its lower valuation and higher-than-industry profitability.
In addition, the stock also has a B grade for Sentiment, consistent with its optimistic analysts’ estimates.
INGR has topped among the 75-stock B-rated Food Makers industry.
Beyond what I have stated above, we have also given INGR grades for Growth, Momentum, and Stability. Get access to all the INGR Ratings here.
Bottom Line
INGR is a leading supplier of specialty ingredients focused on innovation and sustainability. The company actively caters to the specialty food ingredients and health-conscious products market. INGR’s global reach, strategic product offerings, deep research, and financial ability have positioned it for a robust expansion.
The company also announced a quarterly dividend of $0.80 per share on its common stock paid on January 21, 2025, to stockholders of record on January 2, 2025, reflecting its cash flow strength.
Given INGR’s solid financials, accelerating profitability, reliable dividends, and promising growth outlook, this stock could be an ideal buy now.
How Does Ingredion Incorporated (INGR) Stack Up Against Its Peers?
While HWM has an overall POWR Rating of A, investors could also check out these other stocks within the B-rated Food Makers industry with A (Strong Buy) or B (Buy) ratings: Sanderson Farms, Inc. (SAFM), JBS S/A ADR (JBSAY), and Pilgrim's Pride Corporation (PPC).
For exploring more A and B-rated food maker stocks, click here.
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INGR shares were trading at $134.75 per share on Monday afternoon, down $1.69 (-1.24%). Year-to-date, INGR has declined -1.47%, versus a 1.77% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
Is Ingredion a Sweet Opportunity in the Food Ingredients Market? StockNews.com
