MZTI Stock Study (10-5-26)

Posted by Mark on September 11, 2026 at 07:04 | Last modified: October 5, 2026 11:43

Welcome to SSG #500!

I recently studied The Marzetti Co. (MZTI) with a closing price of $99.53.

M* writes:

     > The Marzetti Co manufactures and markets specialty food
     > products for the retail and foodservice channels. Its
     > products include Chick-fil-A sauces and dressings, Olive
     > Garden dressings, Buffalo Wild Wings sauces, Texas
     > Roadhouse steak sauces and frozen rolls, Subway sauces,
     > and private-label products for retailers. The Company
     > has two reportable segments, Retail and Foodservice, and
     > derives maximum revenue from the Retail segment.

Over the past decade, this medium-size company has grown sales and EPS at annualized rates of 6.4% and 3.2%, respectively (FY ends Jun 30). Lines are somewhat up, straight, and parallel except for EPS dip in ’20 and a larger decline in ’22 (due to “broad macroeconomic pressures affecting consumer staples, including sharp input commodity cost fluctuations and supply chain issues” per Google AI). Ten-year EPS R^2 is 0.19, but Value Line (VL) gives an Earnings Predictability score of 75. Number of shares outstanding is unchanged.

Over the past decade, PTPM leads peer and industry averages while falling from 14.6% to 12.5% (’26) with a last-5-year mean of 9.9%. ROE leads peer and industry averages while ranging from 10.7% in ’22 to 21.4% in ’18 with a last-5-year mean of 15.2% (shareholder equity consistently positive and increasing 8.3%/year). Debt-to-Capital is less than peer and industry averages despite increasing from zero to 19.4% (’26) with a last-5-year mean of 7.6%.

Quick Ratio is 0.56 and Interest Coverage 138 (no long-term debt besides uncapitalized leases) per M* who assigns a “Narrow” Economic Moat and a B grade for Financial Health (per BI website). VL gives an A rating for Financial Strength.

At best, I think visual inspection is underwhelming. Because slope is so low, the 2022 EPS decline really dents the chart. The company does recover in two years, however, and the trajectory since has been good. This is not a high-quality growth stock, which BetterInvesting® prefers. Nevertheless, RightStock—a new tool on the BI website that I am tracking for informational purposes—gives a fitness score of 77 and opportunity score of 100.

With regard to sales growth:

• YF gives YOY ACE 4.8% and 2.3% for ’27 and ’28, respectively (based on 6 analysts).
• VL projects 2.1% per year from ’26-’30.
• CFRA projects 4.8% YOY and 3.6% per year for ’27 and ’26-’28, respectively.

My 1.0% forecast is below the range.

With regard to EPS growth:

• MarketWatch gives ACE 3.5% and 3.3% per year for ’25-’27 and ’25-’28, respectively (based on 21 analysts).
• Finviz gives 5-year annualized ACE of 2.9% (4 analysts).
• YF gives YOY ACE of 1.4% contraction and 7.4% growth for ’27 and ’28, respectively (5).
• VL projects 2.7% per year from ’26-’30.
• CFRA projects 3.6% YOY contraction and 1.8% per year growth for ’27 and ’26-’28, respectively.

With projected growth so low to begin with (2.8% mean based on two estimates), I am discounting it entirely to assess investment opportunity. Initial value equals high EPS: $6.98/share from 2026.

My Forecast High P/E is 27.0. Over the past 10 years, high P/E falls from 35.5 to 27.4 (’26) with last-5-year mean of 32.4 (excluding ’22 and ’23 upside outliers of 61.9 and 54.6, respectively) and a last-5-year-mean average P/E of 23.1 (also excluding ’22 low P/E upside outlier of 36.0). I am below the range.

My Forecast Low P/E is 10.5. Over the past 10 years, low P/E falls from 28.0 to 14.9 (’26) with a last-5-year mean of 24.9 (excluding the 36.0). I am forecasting well below the range.

My Low Stock Price Forecast of $73.20 is default based on initial value from above: 26.5% less than previous close and 24.5% less than the 52-week low.

Over the past 10 years, payout ratio (PR) ranges from 46.7% in ’19 to 61.8% in ’25 (excluding upside outliers of 96.9% and 82.9% in ’22 and ’23, respectively) with a last-5-year mean of 60.0%. My 46.0% forecast is below the range.

These inputs land MZTI in the BUY zone with a U/D ratio of 3.4. Total Annualized Return (TAR) is 15.3%.

PAR (using Forecast Average—not High—P/E) of 8.1% is less than I seek for a medium-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I usually start by comparing my inputs with those of Member Sentiment (MS). With only two other studies besides my own (outlier), I won’t even bother.

VL projects a future high EPS (average P/E) of $7.60/share (22.0) that is greater than my $6.98/share (18.8).

MOS is robust in the study because my inputs are near or less than historical/analyst estimates and ranges. VL describes current fundamental headwinds but discounting to zero means any long-term growth should exceed my highest forecast.

With regard to valuation, PEG is 2.3 per M* (quantitative) and undefined per my projected P/E (zero denominator). Relative Value [(current P/E) / 5-year-mean average P/E] is fire-sale low at 0.50. “Quick and dirty” cash flow (including capex, which Google AI insists is correct) has stock undervalued by 40%. M* reports stock undervalued by 28%.

Per U/D, MZTI is a BUY right now under $102/share. Given forecast high price ~$189, the BetterInvesting® TAR criterion is met [188.5 / ((13.17 / 100 ) +1 ) ^ 5] ~ $101.

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