Investors seeking opportunities in the packaged foods sector will find two compelling companies to consider: Hormel Foods Corporation and The Magnum Ice Cream Company N.V. Both operate within the consumer defensive industry, offering diverse food products that appeal to a broad market. Hormel excels with a wide portfolio including meats and snacks, while Magnum specializes in premium ice cream innovation. This article will help you determine which company aligns best with your investment goals.
Table of contents
Companies Overview
I will begin the comparison between Hormel Foods Corporation and The Magnum Ice Cream Company N.V. by providing an overview of these two companies and their main differences.
Hormel Foods Corporation Overview
Hormel Foods Corporation, headquartered in Austin, Minnesota, operates in the packaged foods industry with a mission to develop, process, and distribute a wide range of meat, nuts, and other food products. Serving retail, foodservice, deli, and commercial customers domestically and internationally, Hormel manages four segments including grocery and refrigerated foods. The company markets its products under well-known brands such as SPAM, Skippy, and Jennie-O, emphasizing both perishable and shelf-stable food offerings.
The Magnum Ice Cream Company N.V. Overview
The Magnum Ice Cream Company N.V., based in Amsterdam, focuses exclusively on the ice cream sector within the packaged foods industry. Founded recently with an IPO in late 2025, the company’s operations are concentrated in the Netherlands. Employing around 18,500 people, Magnum Ice Cream dedicates its resources to producing and marketing ice cream products, positioning itself as a specialist in this frozen dessert category under the consumer defensive sector.
Key similarities and differences
Both companies operate in the consumer defensive sector and are listed on the New York Stock Exchange, reflecting their public market presence. They share a focus on packaged foods but differ significantly in product range and geographic base: Hormel offers diverse meat and food products internationally, while Magnum Ice Cream specializes solely in ice cream with a Netherlands-centric footprint. Additionally, Hormel has a longer operational history and a larger market capitalization compared to the younger, more narrowly focused Magnum Ice Cream.
Income Statement Comparison
This table presents a side-by-side comparison of the most recent fiscal year income statement figures for Hormel Foods Corporation and The Magnum Ice Cream Company N.V., providing a snapshot of their financial performance.
| Metric | Hormel Foods Corporation (HRL) | The Magnum Ice Cream Company N.V. (MICC) |
|---|---|---|
| Market Cap | 12.6B USD | 9.3B EUR |
| Revenue | 12.11B USD | 7.95B EUR |
| EBITDA | 1.01B USD | 1.10B EUR |
| EBIT | 742M USD | 725M EUR |
| Net Income | 478M USD | 450M EUR |
| EPS | 0.87 USD | 0.74 EUR |
| Fiscal Year | 2025 | 2024 |
Income Statement Interpretations
Hormel Foods Corporation
Hormel Foods’ revenue showed moderate growth of 6.3% over 2021–2025 but declined slightly by 1.55% in 2025. Net income fell sharply by 47.4% overall and 41.5% in the last year, reflecting margin contractions. The 2025 fiscal year saw a notable drop in gross profit and EBIT margins, indicating pressured profitability despite stable revenue.
The Magnum Ice Cream Company N.V.
Magnum Ice Cream experienced steady revenue growth of 5.9% over 2022–2024 and a 4.3% increase in 2024. Gross margins remained robust near 35%, with a slight improvement last year. However, net income decreased by 11.6% overall and 12.3% in 2024, driven by margin declines and higher operating expenses despite stable EBIT margins.
Which one has the stronger fundamentals?
Both companies face challenges with declining net income and margins, but Magnum Ice Cream maintains higher gross and net margins and steadier revenue growth. Hormel Foods shows weaker net margin trends and more significant profit contractions, despite a larger scale. Overall, Magnum’s profitability metrics appear more favorable amid their respective unfavorable income trends.
Financial Ratios Comparison
Below is a comparison of key financial ratios for Hormel Foods Corporation and The Magnum Ice Cream Company N.V. based on their most recent fiscal year data.
| Ratios | Hormel Foods Corporation (HRL) | The Magnum Ice Cream Company N.V. (MICC) |
|---|---|---|
| ROE | 6.0% | 16.2% |
| ROIC | 4.3% | 16.4% |
| P/E | 24.8 | 19.6 |
| P/B | 1.5 | 3.2 |
| Current Ratio | 2.47 | 0.80 |
| Quick Ratio | 1.20 | 0.35 |
| D/E (Debt-to-Equity) | 0.36 | 0.07 |
| Debt-to-Assets | 21.3% | 3.4% |
| Interest Coverage | 9.2 | 5.2 |
| Asset Turnover | 0.90 | 1.44 |
| Fixed Asset Turnover | 5.41 | 3.37 |
| Payout Ratio | 132% | 2.4% |
| Dividend Yield | 5.3% | 0.12% |
Interpretation of the Ratios
Hormel Foods Corporation
Hormel Foods shows a mixed ratio profile with favorable liquidity, leverage, and interest coverage, yet unfavorable profitability metrics such as net margin (3.95%) and return on equity (6.04%). Valuation ratios like P/E and P/B are neutral, reflecting moderate market expectations. The company pays dividends, with a 5.33% yield considered neutral; coverage by free cash flow appears strained due to negative free cash flow to equity, indicating potential risk in sustaining distributions and buybacks.
The Magnum Ice Cream Company N.V.
Magnum Ice Cream exhibits overall favorable profitability and efficiency ratios, including a strong ROE of 16.2% and ROIC of 16.42%, with a solid asset turnover of 1.44. However, liquidity ratios are weak, with a current ratio of 0.8 and quick ratio of 0.35, suggesting possible short-term solvency concerns. The company does not pay dividends, likely prioritizing reinvestment and growth, supported by positive free cash flow to equity, consistent with its recent IPO and expansion phase.
Which one has the best ratios?
Comparing both, Magnum Ice Cream presents stronger profitability and operational efficiency ratios, but weaker liquidity compared to Hormel Foods, which benefits from better solvency and dividend yield despite weaker returns. Magnum’s higher leverage quality and growth metrics contrast with Hormel’s more conservative financial structure, resulting in Magnum having a slightly more favorable overall ratio stance.
Strategic Positioning
This section compares the strategic positioning of Hormel Foods Corporation and The Magnum Ice Cream Company N.V., focusing on market position, key segments, and exposure to technological disruption:
Hormel Foods Corporation
- Large market cap with established presence in packaged foods; faces moderate competitive pressure.
- Diversified segments including foodservice, international, and retail with multiple product categories.
- No explicit data on technological disruption exposure available.
The Magnum Ice Cream Company N.V.
- Mid-sized market cap focused exclusively on ice cream; competitive pressure details not provided.
- Concentrated business focusing solely on ice cream products.
- No explicit data on technological disruption exposure available.
Hormel Foods Corporation vs The Magnum Ice Cream Company N.V. Positioning
Hormel Foods pursues a diversified strategy across multiple food segments, offering broad revenue streams but facing complex management challenges. Magnum Ice Cream concentrates solely on ice cream, potentially benefiting from focused expertise but limited diversification.
Which has the best competitive advantage?
Based on MOAT evaluation, Magnum Ice Cream holds a favorable competitive advantage with stable profitability, while Hormel Foods shows a very unfavorable position with declining returns and value destruction.
Stock Comparison
The stock prices of Hormel Foods Corporation (HRL) and The Magnum Ice Cream Company N.V. (MICC) have exhibited distinct bearish trends over the past 12 months, with notable price declines and differing volume dynamics.
Trend Analysis
Hormel Foods Corporation’s stock has shown a bearish trend over the past year with a -25.11% price change and accelerating decline. The stock reached a high of 36.31 and a low of 21.59, with volatility indicated by a 3.52 standard deviation.
The Magnum Ice Cream Company’s stock also experienced a bearish trend over the last 12 months, with a smaller decline of -3.97% and stable acceleration. Prices ranged narrowly between 15.24 and 15.88, with low volatility at 0.26 standard deviation.
Comparing both stocks, Hormel Foods Corporation faced a significantly larger drop in price, delivering lower market performance than The Magnum Ice Cream Company over the analyzed period.
Target Prices
Here is the current target price consensus from reliable analysts for the selected companies:
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Hormel Foods Corporation | 30 | 26 | 27.75 |
| The Magnum Ice Cream Company N.V. | 16 | 16 | 16 |
Analysts expect Hormel Foods to trade notably above its current price of 22.85 USD, indicating potential upside. Magnum Ice Cream’s consensus target of 16 USD is slightly above its current price of 15.24 USD, suggesting modest growth expectations.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for Hormel Foods Corporation (HRL) and The Magnum Ice Cream Company N.V. (MICC):
Rating Comparison
HRL Rating
- Rating: B, considered very favorable by analysts.
- Discounted Cash Flow Score: 4, favorable, indicating decent valuation based on cash flow.
- ROE Score: 2, moderate, showing average efficiency in generating profit from equity.
- ROA Score: 3, moderate, reflecting average asset utilization efficiency.
- Debt To Equity Score: 3, moderate, implying balanced financial risk with manageable debt levels.
- Overall Score: 3, moderate overall financial health assessment.
MICC Rating
- Rating: B-, also considered very favorable by analysts.
- Discounted Cash Flow Score: 1, very unfavorable, suggesting potential overvaluation concerns.
- ROE Score: 5, very favorable, indicating strong profit generation from shareholders’ equity.
- ROA Score: 4, favorable, indicating good efficiency in asset use.
- Debt To Equity Score: 1, very unfavorable, showing higher financial risk due to debt reliance.
- Overall Score: 3, moderate overall financial health assessment.
Which one is the best rated?
Both HRL and MICC have an overall moderate score of 3 and receive very favorable ratings, B and B- respectively. HRL shows strength in discounted cash flow and balanced debt, while MICC excels in profitability metrics but has higher financial risk.
Scores Comparison
The scores comparison between Hormel Foods Corporation and The Magnum Ice Cream Company N.V. is as follows:
HRL Scores
- Altman Z-Score: 5.17, indicating a safe zone status.
- Piotroski Score: 7, classified as strong financials.
MICC Scores
- No Altman Z-Score provided.
- No Piotroski Score provided.
Which company has the best scores?
Based on the available data, HRL has clear financial strength with a safe zone Altman Z-Score and a strong Piotroski Score. MICC lacks any provided score data for comparison.
Grades Comparison
The following is a comparison of the available grades for the two companies:
Hormel Foods Corporation Grades
This table summarizes recent grades assigned by recognized financial institutions:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Barclays | Maintain | Overweight | 2025-12-09 |
| JP Morgan | Maintain | Overweight | 2025-12-05 |
| B of A Securities | Maintain | Neutral | 2025-12-05 |
| Piper Sandler | Maintain | Neutral | 2025-12-05 |
| JP Morgan | Maintain | Overweight | 2025-11-21 |
| Piper Sandler | Maintain | Neutral | 2025-11-06 |
| Goldman Sachs | Maintain | Buy | 2025-10-30 |
| Goldman Sachs | Maintain | Buy | 2025-08-29 |
| B of A Securities | Maintain | Neutral | 2025-08-29 |
| Barclays | Maintain | Overweight | 2025-08-29 |
The overall trend for Hormel Foods Corporation shows a balanced mix of buy-related and neutral grades, with a consensus rating of Hold indicating moderate confidence.
The Magnum Ice Cream Company N.V. has no available reliable grades for analysis.
Which company has the best grades?
Hormel Foods Corporation has received multiple reliable grades ranging from Neutral to Buy/Overweight, reflecting moderate optimism. The Magnum Ice Cream Company N.V. lacks any grading data, which may increase uncertainty for investors assessing its potential.
Strengths and Weaknesses
Below is a comparison of key strengths and weaknesses for Hormel Foods Corporation (HRL) and The Magnum Ice Cream Company N.V. (MICC) based on the most recent financial and operational data.
| Criterion | Hormel Foods Corporation (HRL) | The Magnum Ice Cream Company N.V. (MICC) |
|---|---|---|
| Diversification | Strong product and segment diversification with retail, foodservice, and international segments contributing to revenue | Limited product diversification focused mainly on ice cream products |
| Profitability | Low net margin (3.95%) and declining ROIC; company is shedding value with very unfavorable moat | Higher net margin (5.66%) and ROIC well above WACC; company is creating value with favorable moat |
| Innovation | Moderate innovation with stable product segments but lacking significant growth catalysts | Demonstrates innovation in premium ice cream segment, sustaining competitive advantage |
| Global presence | Significant presence especially in U.S. retail and foodservice markets; international segment smaller but growing | More limited global footprint but stable in core markets |
| Market Share | Established leader in various food categories with strong retail and foodservice penetration | Smaller market share but strong brand recognition in premium ice cream niche |
Key takeaways: Hormel Foods offers broad diversification and strong market presence but struggles with profitability and value creation. Magnum Ice Cream, while less diversified, shows solid profitability, efficient capital use, and a favorable competitive position, appealing for investors focused on value creation.
Risk Analysis
Below is a comparative overview of key risks for Hormel Foods Corporation (HRL) and The Magnum Ice Cream Company N.V. (MICC) based on recent data:
| Metric | Hormel Foods Corporation (HRL) | The Magnum Ice Cream Company N.V. (MICC) |
|---|---|---|
| Market Risk | Low beta (0.324) suggests lower volatility relative to market | Beta 0, indicating minimal historical volatility data due to recent IPO |
| Debt Level | Moderate debt-to-equity of 0.36, favorable leverage and interest coverage | Very low debt-to-equity (0.07), strong balance sheet |
| Regulatory Risk | US-based with standard food industry regulations, stable environment | EU-based, potential exposure to stricter EU food and safety regulations |
| Operational Risk | Diverse product portfolio, stable supply chain with 20K employees | Smaller scale, newer operation with 18.5K employees, possible scaling risks |
| Environmental Risk | Moderate, with ongoing trends pushing for sustainable food production | Potentially higher due to EU environmental regulations and consumer expectations |
| Geopolitical Risk | Primarily US operations, limited geopolitical exposure | Exposed to European market dynamics, currency fluctuations, and EU policies |
Synthesis: The most prominent risk for HRL is moderate market and regulatory exposure in the US packaged foods sector, but its strong liquidity and debt metrics mitigate financial risk. MICC, being a newer player with a recent IPO, faces operational scaling risks and high regulatory scrutiny in the EU, compounded by weaker liquidity ratios. Investors should weigh HRL’s stability against MICC’s growth potential with corresponding risk.
Which Stock to Choose?
Hormel Foods Corporation (HRL) shows a declining income trend with unfavorable growth in net margin and earnings per share. Its financial ratios are slightly favorable overall, with strong liquidity and moderate debt levels. Profitability metrics and ROIC compared to WACC indicate value destruction, while the company holds a very favorable rating and solid financial scores.
The Magnum Ice Cream Company N.V. (MICC) presents a more favorable income profile with stable revenue growth and better profitability margins. Financial ratios lean favorable despite weaknesses in liquidity and valuation metrics. The company demonstrates value creation through ROIC above WACC and maintains a very favorable rating, though its discounted cash flow and debt-to-equity scores are less supportive.
Investors with a tolerance for risk and a focus on growth might find MICC’s stable profitability and value creation appealing. Conversely, more risk-averse investors prioritizing strong liquidity and rating consistency may view HRL’s profile as more suitable, despite its unfavorable income growth and value erosion.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Hormel Foods Corporation and The Magnum Ice Cream Company N.V. to enhance your investment decisions:
