Nestlé (OTCMKTS: NSRGY) and Blue Buffalo Pet Products (NASDAQ:BUFF) are both consumer staples companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, analyst recommendations, valuation and dividends.
Nestlé pays an annual dividend of $2.12 per share and has a dividend yield of 2.7%. Blue Buffalo Pet Products does not pay a dividend. Nestlé pays out 62.2% of its earnings in the form of a dividend.
This table compares Nestlé and Blue Buffalo Pet Products’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Nestlé||$91.22 billion||2.63||$7.30 billion||$3.41||22.65|
|Blue Buffalo Pet Products||$1.27 billion||6.14||$193.52 million||$0.95||42.11|
Nestlé has higher revenue and earnings than Blue Buffalo Pet Products. Nestlé is trading at a lower price-to-earnings ratio than Blue Buffalo Pet Products, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
1.4% of Nestlé shares are held by institutional investors. Comparatively, 94.6% of Blue Buffalo Pet Products shares are held by institutional investors. 7.7% of Blue Buffalo Pet Products shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This table compares Nestlé and Blue Buffalo Pet Products’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Blue Buffalo Pet Products||15.18%||77.83%||24.37%|
This is a summary of current ratings for Nestlé and Blue Buffalo Pet Products, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Blue Buffalo Pet Products||2||7||5||0||2.21|
Blue Buffalo Pet Products has a consensus price target of $34.64, indicating a potential downside of 13.41%. Given Blue Buffalo Pet Products’ stronger consensus rating and higher possible upside, analysts clearly believe Blue Buffalo Pet Products is more favorable than Nestlé.
Risk & Volatility
Nestlé has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500. Comparatively, Blue Buffalo Pet Products has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500.
Blue Buffalo Pet Products beats Nestlé on 12 of the 16 factors compared between the two stocks.
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.
Blue Buffalo Pet Products Company Profile
Blue Buffalo Pet Products, Inc., through its subsidiary, Blue Buffalo Company, Ltd., operates as a pet food company in the United States, Canada, Japan, and Mexico. It develops, produces, markets, and sells dog and cat food under the BLUE Life Protection Formula, BLUE Wilderness, BLUE Basics, BLUE Freedom, and BLUE Natural Veterinary Diet lines. The company sells its products to retail partners and distributors in specialty channels, including national pet superstore chains, regional pet store chains, neighborhood pet stores, farm and feed stores, e-commerce retailers, military outlets, hardware stores, and veterinary clinics and hospitals. Blue Buffalo Pet Products, Inc. was founded in 2002 and is headquartered in Wilton, Connecticut.
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