MGP Ingredients (MGPI) shares are near flat YTD and in a long consolidation pattern after trending strong in 2020-2021. Although there are near-term concerns with the rising costs of wheat and natural gas for its operations, it is an attractive small cap that has continued to operate strong and capture several secular growth trends.

MGP is a leading producer and supplier of premium distilled spirits, branded spirits and food ingredients. Distilled spirits include premium bourbon and rye whiskeys and grain neutral spirits including vodka and gin. MGP is also a top producer of high-quality industrial alcohol for use in both food and non-food applications. The Company’s protein and starch food ingredients provide a host of functional, nutritional, and sensory benefits for a wide range of food products to serve the consumer packaged goods industry.

MGPI has a market cap of $1.8B and trades 18.9X Earnings, 13.3X EBITDA and 2.88X Sales with a strong balance sheet. Forecasts are calling for 12.8% revenue growth and 9.3% EBITDA growth in 2022. MGPI’s latest earnings call cited strong demand for aged whiskey as a key growth driver. It also noted that Industrial Alcohol and White Goods margins are set to normalize to lower historical levels due to addition supply. MGPI sees a big opportunity in plant-based proteins with wheat-based texturized proteins as well as pea-based or other forms of plant-based proteins.

MGPI is a great way to position in the growing industry of plant-based alternatives without being tied to a single brand and also capitalizes on the strong growth in American Whiskey. It is a financially sound company with a great balance sheet, strong cash flow and attractive valuation.