Financial Contrast: Nestlé (NSRGY) versus The Competition

Nestlé (OTCMKTS: NSRGY) is one of 25 public companies in the “Food & kindred products” industry, but how does it compare to its competitors? We will compare Nestlé to related businesses based on the strength of its risk, profitability, valuation, dividends, earnings, analyst recommendations and institutional ownership.

Dividends

Nestlé pays an annual dividend of $2.52 per share and has a dividend yield of 2.0%. Nestlé pays out 56.1% of its earnings in the form of a dividend. As a group, “Food & kindred products” companies pay a dividend yield of 2.6% and pay out 52.6% of their earnings in the form of a dividend. Nestlé lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Insider & Institutional Ownership

1.1% of Nestlé shares are held by institutional investors. Comparatively, 58.4% of shares of all “Food & kindred products” companies are held by institutional investors. 13.4% of shares of all “Food & kindred products” companies are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Nestlé and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nestlé N/A N/A N/A
Nestlé Competitors 4.60% 11.43% 4.63%

Valuation and Earnings

This table compares Nestlé and its competitors revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Nestlé $89.95 billion $13.05 billion 28.24
Nestlé Competitors $9.53 billion $1.14 billion 8.89

Nestlé has higher revenue and earnings than its competitors. Nestlé is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Nestlé and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nestlé 1 4 9 0 2.57
Nestlé Competitors 348 1184 1202 33 2.33

As a group, “Food & kindred products” companies have a potential downside of 1.85%. Given Nestlé’s competitors higher probable upside, analysts clearly believe Nestlé has less favorable growth aspects than its competitors.

Volatility & Risk

Nestlé has a beta of 0.37, suggesting that its stock price is 63% less volatile than the S&P 500. Comparatively, Nestlé’s competitors have a beta of 0.91, suggesting that their average stock price is 9% less volatile than the S&P 500.

Summary

Nestlé competitors beat Nestlé on 10 of the 15 factors compared.

About Nestlé

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; and Nestlé Waters segments. It offers baby foods under the Cerelac, Gerber, and NaturNes brands; bottled water under the Nestlé Pure Life, Perrier, Poland Spring, and S.Pellegrino brands; cereals under the Fitness, Nesquik, cheerios, and Lion Cereals brands; and chocolate and confectionery products under the KitKat, Nestle L'atelier, Nestle Toll House, Milkybar, Smarties, Quality Street, Aero, Garoto, Orion, and Cailler brands. The company also provides coffee products under the Nescafé original, Nespresso, Nescafé Dolce Gusto, Nescafé, Nescafé Original 3 in 1, Coffee-Mate, Nescafé Gold, and Nescafé Cappuccino brands; culinary, chilled, and frozen foods under the Maggi, Hot Pockets, Stouffer's, Thomy, Jacks, TombStone, Buitoni, DiGiorno, 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 Milo, Nescafé, Maggi, Chef, Nestea, Stouffer's, Chef-Mate, Sjora, Minor's, and Lean Cuisine brand names; healthcare nutrition products under the Boost, Peptamen, Resource, and Nutren Junior brands; ice cream products under the Dreyer's, Mövenpick, Häagen-Dazs, Nestlé Ice Cream, and Extrême brands; and pet care products under the Purina, ONE, Alpo, Felix, Pro Plan, Cat Chow, Fancy Feast, Chef Michael's, Bakers, Friskies, Dog Chow, Beneful, and Gourmet brands. Further, it provides coffee creamers under the Starbucks brand. The company was founded in 1866 and is headquartered in Vevey, Switzerland.

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