Financial Survey: Danone (DANOY) & Nestlé (NSRGY)

Danone (OTCMKTS: DANOY) and Nestlé (OTCMKTS:NSRGY) are both large-cap consumer staples companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, risk, institutional ownership, valuation, dividends and earnings.

Volatility & Risk

Danone has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500. Comparatively, Nestlé has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for Danone and Nestlé, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Danone 0 4 1 0 2.20
Nestlé 0 2 0 0 2.00

Profitability

This table compares Danone and Nestlé’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Danone N/A N/A N/A
Nestlé N/A N/A N/A

Dividends

Danone pays an annual dividend of $0.37 per share and has a dividend yield of 2.4%. Nestlé pays an annual dividend of $2.12 per share and has a dividend yield of 2.8%. Danone pays out 42.0% of its earnings in the form of a dividend. Nestlé pays out 62.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Insider & Institutional Ownership

0.4% of Danone shares are owned by institutional investors. Comparatively, 1.4% of Nestlé shares are owned by institutional investors. 1.0% of Danone shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Danone and Nestlé’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Danone $4.00 billion 11.90 $2.77 billion $0.88 17.55
Nestlé $91.22 billion 2.63 $7.30 billion $3.41 22.57

Nestlé has higher revenue and earnings than Danone. Danone is trading at a lower price-to-earnings ratio than Nestlé, indicating that it is currently the more affordable of the two stocks.

Danone Company Profile

Danone SA operates in the food and beverage industry worldwide. The company operates through four segments: EDP International, EDP Noram, Specialized Nutrition, and Waters. It offers yogurts under the Danone, Activia, DanActiv, Danimals, Dannon, Danonino, Happy Family, Horizon Organic, Light & Fit, Oikos, YoCrunch, and Danio brands; and almond and soy milk, ice creams and novelties, and powdered proteins under the Silk, So Delicious, Vega, and Alpro brands. The company also provides coffee creamers and beverages under the Delight, Magicow, Dunkin Donuts, Land O Lakes, and SToK brands; and milk, cheese, organic snacks, and other organic dairy products under the Horizon brand; desserts under the Danette and Danissimo brands; and packaged salads and green vegetables, and fresh and frozen organic fruits, and vegetables under the Earthbound Farm brand. In addition, it offers specialized nutrition products for infants and young children to complement breast feeding under the Aptamil, Nutrilon, Cow & Gate, Blédina, Bebelac, Malyutka, and Dumex brands. Further, the company provides oral and tube feeding products for the dietary treatment of babies and children; liquid oral nutritional supplements; and hypoallergenic products for babies and children with dairy or multiple food protein allergies primarily under the Nutricia brand. Additionally, it offers packaged natural, flavored, and vitamin-enriched water; and fruit juices and vitamins under the evian, Volvic, Badoit, Aqua, Mizone, Bonafont, Villavicencio, Villa del Sur, Fontvella, Lanjarón, and Zywiec Zdroj brands. The company also markets its products under the Actimel, Tema, Taillefine, Ser, and Les 2 Vaches brands. It distributes its products through retail chains and traditional market outlets; hospitals, clinics, and pharmacies; and e-commerce. The company was formerly known as Groupe Danone and changed its name to Danone SA in April 2009. Danone SA was founded in 1899 and is based in Paris, France.

Nestlé Company Profile

Nestlé S.A., together with its subsidiaries, operates as a food and beverage company. The company operates through Zone Europe, Middle East and North Africa; Zone Americas; Zone Asia, Oceania and sub-Saharan Africa; Nestlé Waters; and Nestlé Nutrition segments. It offers baby foods under the Cerelac, Gerber, Gerber Graduates, NaturNes, and Nestum brands; bottled water under the Nestlé Pure Life, Perrier, Poland Spring, and S.Pellegrino brands; cereals under the Chocapic, Cini Minis, Cookie Crisp, Estrelitas, Fitness, and Nesquik Cereal brands; and chocolate and confectionery products under the Smarties, Cailler, Butterfinger, Crunch, Aero, KitKat, Nestle Toll House, Wonka, and Orion brands. The company also provides coffee products under the Nescafé, Nescafé Dolce Gusto, Nespresso, Nescafé original, Coffee-Mate, Nescafé Original 3 in 1, Nescafé Gold Blend, Nescafé Shakissimo, and Nescafé Cappuccino brands; culinary, chilled, and frozen foods under the Maggi, Stouffer's, Hot Pockets, Buitoni, DiGiorno, Jacks, Herta, TombStone, Thomy, and Lean Cuisine brands; dairy products under the Carnation, Nido, Coffee-Mate, and La Laitière brands; and drinks under the Nesquik, Nestea, and Milo brands. In addition, it offers food service products under the Chef, Chef-Mate, Maggi, Milo, Minor's, Nescafé, Nestea, Sjora, Lean Cuisine, and Stouffer's brand names; healthcare nutrition products under the Boost, Nutren Junior, Peptamen, and Resource brands; ice cream products under the Dreyer's, Extrême, Häagen-Dazs, Mövenpick, and Nestlé Ice Cream brands; and petcare products under the Purina Cat Chow, Alpo, Felix, ONE, Pro Plan, Chef Michael's, Gourmet, Fancy Feast, Beneful, Dog Chow, Bakers Complete, and Friskies brands. The company was founded in 1866 and is headquartered in Vevey, Switzerland.

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