CPO Ingredion, Inc.

Looking for a way to invest in food? Corn Products International (CPO) is expected to see double digit earnings growth in 2012. This Zacks #2 Rank (Buy) also is an attractive value stock, with a forward P/E of just 10.9.

Corn Products is the largest producer of dextrose in the world and manufactures starches, high fructose corn syrups and glucose.

The company provides a variety of ingredients to customers in 60 industries including food, beverages, pharmaceuticals, animal feed, corrugating, paper and textiles in 50 countries around the world.

Earnings Rose 6% Year Over Year in Q4

On Feb 14, Corn Products reported its fourth quarter and full year results and met the Zacks Consensus Estimate of $1.11. That is earnings growth of 6% versus the fourth quarter of 2010 when it made $1.05.

All of its business segments saw an increase in sales in the fourth quarter. North America, its biggest market, saw sales jump 13% mainly due to strong price and mix.

In South America and Europe, Middle East, Africa, volumes fell even as sales still rose. South American volumes were soft due to slower economic growth and weather. Europe's slowing economy dragged down the volumes in the Europe, Middle East and Africa segment.

Upbeat on 2012

Corn Products provided 2012 earnings guidance in the range of $5.00 to $5.25, which is earnings growth between 7% and 12%.

Sales are expected to top $7 billion, a 12.5% increase from 2011's sales of $6.2 billion.

The company is also expected to change its name in May to Ingredion to reflect that it isn't just about corn.

2012 Zacks Consensus Estimate Rises

In the last 30 days, the 2012 Zacks Consensus Estimate has risen to $5.17 from $5.15 as one estimate was revised higher.

This is within the company's guidance range.

It is also further earnings growth of 10.4%.

Still a Value Stock

I've written about Corn Products extensively over the last few years and it has remained a value stock for most of that time despite the shares being near 5 year highs.

Earnings have also risen along with the stock. In 2009, the company made just $2.00 a share so it has more than doubled its earnings in the last 2 years. That's not too shabby for a company that has been in business over 100 years.

Corn Products has a low P/E, but it also has other solid value fundamentals.

Its price-to-book ratio is just 2.0, which is well under the 3.0 ratio that I use to find value stocks.

The company also has a price-to-sales ratio of 0.7. A P/S ratio under 1.0 usually means a company is undervalued.

Additionally, Corn Products rewards its shareholders with a dividend, currently yielding 1.4%.

For investors looking for a food company with global reach and attractive valuations, Corn Products is one to put on the short list.

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Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her on twitter at @TraceyRyniec.

 
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