Contrasting Cott (COT) and Coca-Cola European Partners (CCE)

Cott (NYSE: COT) and Coca-Cola European Partners (NYSE:CCE) are both consumer staples companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, earnings, institutional ownership, risk, profitability, valuation and analyst recommendations.

Risk and Volatility

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Cott has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500. Comparatively, Coca-Cola European Partners has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500.

Dividends

Cott pays an annual dividend of $0.24 per share and has a dividend yield of 1.6%. Coca-Cola European Partners pays an annual dividend of $1.28 per share and has a dividend yield of 3.1%. Cott pays out 342.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Coca-Cola European Partners pays out 53.6% of its earnings in the form of a dividend. Coca-Cola European Partners has raised its dividend for 9 consecutive years. Coca-Cola European Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

30.9% of Coca-Cola European Partners shares are held by institutional investors. 2.1% of Cott shares are held by company insiders. Comparatively, 3.0% of Coca-Cola European Partners shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Cott and Coca-Cola European Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cott -0.05% 0.23% 0.05%
Coca-Cola European Partners 5.91% 16.12% 5.77%

Analyst Ratings

This is a breakdown of current recommendations for Cott and Coca-Cola European Partners, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cott 0 4 4 0 2.50
Coca-Cola European Partners 2 3 4 0 2.22

Cott currently has a consensus price target of $17.33, suggesting a potential upside of 18.83%. Coca-Cola European Partners has a consensus price target of $42.33, suggesting a potential upside of 1.49%. Given Cott’s stronger consensus rating and higher possible upside, research analysts clearly believe Cott is more favorable than Coca-Cola European Partners.

Valuation & Earnings

This table compares Cott and Coca-Cola European Partners’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cott $2.27 billion 0.90 -$1.40 million $0.07 208.29
Coca-Cola European Partners $12.50 billion 1.62 $777.64 million $2.39 17.45

Coca-Cola European Partners has higher revenue and earnings than Cott. Coca-Cola European Partners is trading at a lower price-to-earnings ratio than Cott, indicating that it is currently the more affordable of the two stocks.

Summary

Coca-Cola European Partners beats Cott on 12 of the 16 factors compared between the two stocks.

Cott Company Profile

Cott Corporation, together with its subsidiaries, operates as a route based service company in North America and Europe. It operates in three segments: Route Based Services; Coffee, Tea and Extract Solutions; and All Other. The company's product portfolio includes bottled water, coffee, brewed tea, water dispensers, coffee and tea brewers, specialty coffee, liquid coffee or tea concentrate, single cup coffee, cold brewed coffee, iced blend coffee or tea beverages, blended teas, hot tea, sparkling tea, coffee or tea extract solutions, filtration equipment, hot chocolate, soups, malt drinks, creamers/whiteners, cereals, beverage concentrates, and mineral water. It provides its services to residences, businesses, restaurant chains, hotels and motels, small and large retailers, and healthcare facilities. The company serves approximately 2.4 million customers or delivery points through its platform, sales and distribution facilities, and fleets, as well as through wholesalers and distributors. Cott Corporation was incorporated in 1955 and is based in Mississauga, Canada.

Coca-Cola European Partners Company Profile

Coca-Cola Enterprises, Inc. (CCE) markets, produces and distributes nonalcoholic beverages. The Company serves customers across Belgium, continental France, Great Britain, Luxembourg, Monaco, the Netherlands, Norway and Sweden. The Company’s segments include Europe and Corporate. CCE is The Coca-Cola Company’s strategic bottling partner in Western Europe. The Company has bottling rights within its territories for various beverage brands, including products with the name Coca-Cola. The Company offers beverages, such as Coca-Cola trademark beverages, allied beverages, still beverages and certain other beverages specific to the European market. In Great Britain, the Company distributes Schweppes, Dr Pepper, Oasis and Schweppes Abbey Well. The Company distributes Capri-Sun beverages in France, Belgium, the Netherlands and Luxembourg. The Company also produces and distributes Capri-Sun beverages in Great Britain. The Company distributes Monster-branded beverages.

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