MGP Ingredients (NasdaqGS:MGPI) - Share price, News & Analysis

Q: What is the Fair Price of MGPI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

MGPI ($95.36) is trading below our estimate of [[fair value]] ($112.81)

MGPI fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	0/6
Past Performance	4/6
Financial Health	5/6
Dividends	0/6

MGPI Stock Overview

MGP Ingredients, Inc., together with its subsidiaries, produces and supplies distilled spirits, branded spirits, and food ingredients.

Rewards

Trading at 15.5% below our estimate of its fair value

Earnings grew by 146.6% over the past year

Risk Analysis

Large one-off items impacting financial results

MGP Ingredients Competitors

Duckhorn Portfolio

NYSE:NAPA

US$2.5b

Vintage Wine Estates

NasdaqGM:VWE

US$548.5m

Crimson Wine Group

OTCPK:CWGL

US$163.0m

Brown-Forman

NYSE:BF.B

US$34.1b

Price History & Performance

Summary of all time highs, changes and price drops for MGP Ingredients
Historical stock prices
Current Share Price	US$95.36
52 Week High	US$104.00
52 Week Low	US$58.41
Beta	1.14
1 Month Change	-2.39%
3 Month Change	14.56%
1 Year Change	46.06%
3 Year Change	43.81%
5 Year Change	86.36%
Change since IPO	1,032.99%

Recent News & Updates

Jun 10

Calculating The Fair Value Of MGP Ingredients, Inc. (NASDAQ:MGPI)

Does the June share price for MGP Ingredients, Inc. ( NASDAQ:MGPI ) reflect what it's really worth? Today, we will...

Jun 04

MGP Ingredients: Upside From Here Is Limited

MGP Ingredients has had a great run over the past couple of months, as strong fundamental performance has driven shares higher. This trend looks set to continue and the long-term outlook for the company is promising. However, shares are now more or less fully valued, leaving additional upside limited.

Shareholder Returns

	MGPI	US Beverage	US Market
7D	2.4%	6.3%	6.6%
1Y	46.1%	9.4%	-18.4%

Return vs Industry: MGPI exceeded the US Beverage industry which returned 9.4% over the past year.

Return vs Market: MGPI exceeded the US Market which returned -18.4% over the past year.

Price Volatility

Is MGPI's price volatile compared to industry and market?
MGPI volatility
MGPI Average Weekly Movement	5.3%
Beverage Industry Average Movement	6.9%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.6%
10% least volatile stocks in US Market	3.2%

Stable Share Price: MGPI is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: MGPI's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1941	672	Dave Colo	https://www.mgpingredients.com

MGP Ingredients, Inc., together with its subsidiaries, produces and supplies distilled spirits, branded spirits, and food ingredients. It operates through three segments: Distillery Products; Branded Spirits; and Ingredient Solutions. The Distillery Products segment provides food grade alcohol for beverage applications that include bourbon and rye whiskeys, as well as grain neutral spirits, including vodka and gin; and food-grade industrial alcohol, which is used as an ingredient in foods, personal care products, cleaning solutions, pharmaceuticals, and various other products.

MGP Ingredients Fundamentals Summary

How do MGP Ingredients's earnings and revenue compare to its market cap?
MGPI fundamental statistics
Market Cap	US$2.10b
Earnings (TTM)	US$112.43m
Revenue (TTM)	US$713.63m

18.6x

P/E Ratio

2.9x

P/S Ratio

Is MGPI overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
MGPI income statement (TTM)
Revenue	US$713.63m
Cost of Revenue	US$496.43m
Gross Profit	US$217.20m
Other Expenses	US$104.77m
Earnings	US$112.43m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	5.11
Gross Margin	30.44%
Net Profit Margin	15.76%
Debt/Equity Ratio	34.2%

How did MGPI perform over the long term?

See historical performance and comparison

Dividends

0.5%

Current Dividend Yield

9%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is MGPI undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for MGPI?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for MGPI. This is calculated by dividing MGPI's market cap by their current preferred multiple.
What is MGPI's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$2.10b

MGPI key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	3.2x
Enterprise Value/EBITDA	15.6x
PEG Ratio	19.7x

Price to Earnings Ratio vs Peers

How does MGPI's PE Ratio compare to its peers?

MGPI PE Ratio vs Peers

The above table shows the PE ratio for MGPI vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	45.5x
NAPA Duckhorn Portfolio	39.6x	18.5%	US$2.5b
VWE Vintage Wine Estates	59.4x	37.9%	US$548.5m
CWGL Crimson Wine Group	42.3x	n/a	US$163.0m
BF.B Brown-Forman	40.9x	9.6%	US$34.1b
MGPI MGP Ingredients	18.6x	0.9%	US$2.1b

Forward PE

Price-To-Earnings vs Peers: MGPI is good value based on its Price-To-Earnings Ratio (18.6x) compared to the peer average (45.5x).

Price to Earnings Ratio vs Industry

How does MGPI's PE Ratio compare vs other companies in the North American Beverage Industry?

Price-To-Earnings vs Industry: MGPI is good value based on its Price-To-Earnings Ratio (18.6x) compared to the US Beverage industry average (30x)

Price to Earnings Ratio vs Fair Ratio

What is MGPI's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

MGPI PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	18.6x
Fair PE Ratio	17.4x

Price-To-Earnings vs Fair Ratio: MGPI is expensive based on its Price-To-Earnings Ratio (18.6x) compared to the estimated Fair Price-To-Earnings Ratio (17.4x).

Share Price vs Fair Value

What is the Fair Price of MGPI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: MGPI ($95.36) is trading below our estimate of fair value ($112.81)

Significantly Below Fair Value: MGPI is trading below fair value, but not by a significant amount.

Price to Earnings Growth Ratio

PEG Ratio: MGPI is poor value based on its PEG Ratio (19.7x)

Discover undervalued companies

Future Growth

How is MGP Ingredients forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

0.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: MGPI's forecast earnings growth (0.9% per year) is below the savings rate (1.9%).

Earnings vs Market: MGPI's earnings (0.9% per year) are forecast to grow slower than the US market (13.9% per year).

High Growth Earnings: MGPI's earnings are forecast to grow, but not significantly.

Revenue vs Market: MGPI's revenue (4.1% per year) is forecast to grow slower than the US market (8.4% per year).

High Growth Revenue: MGPI's revenue (4.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if MGPI's Return on Equity is forecast to be high in 3 years time

Discover growth companies

Past Performance

How has MGP Ingredients performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

19.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: MGPI has a large one-off gain of $28.7M impacting its March 31 2022 financial results.

Growing Profit Margin: MGPI's current net profit margins (15.8%) are higher than last year (11.3%).

Past Earnings Growth Analysis

Earnings Trend: MGPI's earnings have grown by 19.5% per year over the past 5 years.

Accelerating Growth: MGPI's earnings growth over the past year (146.6%) exceeds its 5-year average (19.5% per year).

Earnings vs Industry: MGPI earnings growth over the past year (146.6%) exceeded the Beverage industry 8.9%.

Return on Equity

High ROE: MGPI's Return on Equity (16.6%) is considered low.

Discover strong past performing companies

Financial Health

How is MGP Ingredients's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: MGPI's short term assets ($395.3M) exceed its short term liabilities ($84.5M).

Long Term Liabilities: MGPI's short term assets ($395.3M) exceed its long term liabilities ($313.0M).

Debt to Equity History and Analysis

Debt Level: MGPI's net debt to equity ratio (30.2%) is considered satisfactory.

Reducing Debt: MGPI's debt to equity ratio has increased from 27% to 34.2% over the past 5 years.

Debt Coverage: MGPI's debt is well covered by operating cash flow (40.2%).

Interest Coverage: MGPI's interest payments on its debt are well covered by EBIT (24.7x coverage).

Balance Sheet

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Dividend

What is MGP Ingredients's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

0.50%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: MGPI's dividend (0.5%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.57%).

High Dividend: MGPI's dividend (0.5%) is low compared to the top 25% of dividend payers in the US market (4.24%).

Stability and Growth of Payments

Stable Dividend: MGPI is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: MGPI is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.

Earnings Payout to Shareholders

Earnings Coverage: MGPI is not paying a notable dividend for the US market.

Cash Payout to Shareholders

Cash Flow Coverage: MGPI is not paying a notable dividend for the US market.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

2.3yrs

Average management tenure

CEO

Dave Colo (58 yo)

2.25yrs

Tenure

US$3,373,695

Compensation

Mr. David J. Colo, also known as Dave, has been Chief Executive Officer of MGP Ingredients, Inc. since May 21, 2020 and its President since March 16, 2020 and Director since August 18, 2015. Mr. Colo was C...

CEO Compensation Analysis

Compensation vs Market: Dave's total compensation ($USD3.37M) is below average for companies of similar size in the US market ($USD5.47M).

Compensation vs Earnings: Dave's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: MGPI's management team is considered experienced (2.3 years average tenure).

Board Members

Experienced Board: MGPI's board of directors are not considered experienced ( 1 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: MGPI insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/26 00:00
End of Day Share Price	2022/06/24 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31