The Coca-Cola (KO) versus Cott (COT) Head-To-Head Review

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

Earnings & Valuation

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This table compares The Coca-Cola and Cott’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
The Coca-Cola $35.41 billion 5.29 $1.25 billion $1.91 22.99
Cott $2.27 billion 0.91 -$1.40 million $0.07 210.57

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

Profitability

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

Net Margins Return on Equity Return on Assets
The Coca-Cola 3.52% 38.36% 9.18%
Cott -0.05% 0.23% 0.05%

Analyst Recommendations

This is a summary of recent ratings for The Coca-Cola and Cott, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Coca-Cola 2 10 10 0 2.36
Cott 0 4 4 0 2.50

The Coca-Cola currently has a consensus price target of $48.95, indicating a potential upside of 11.45%. Cott has a consensus price target of $17.33, indicating a potential upside of 17.54%. Given Cott’s stronger consensus rating and higher possible upside, analysts clearly believe Cott is more favorable than The Coca-Cola.

Institutional and Insider Ownership

66.2% of The Coca-Cola shares are held by institutional investors. 1.5% of The Coca-Cola shares are held by company insiders. Comparatively, 2.1% of Cott shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

The Coca-Cola pays an annual dividend of $1.56 per share and has a dividend yield of 3.6%. Cott pays an annual dividend of $0.24 per share and has a dividend yield of 1.6%. The Coca-Cola pays out 81.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. 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. The Coca-Cola has raised its dividend for 55 consecutive years. The Coca-Cola is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

The Coca-Cola has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500. Comparatively, Cott has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500.

Summary

The Coca-Cola beats Cott on 12 of the 17 factors compared between the two stocks.

About The Coca-Cola

The Coca-Cola Company, a beverage company, manufactures and distributes various nonalcoholic beverages worldwide. The company provides water, enhanced water, and sports drinks; juices; juice, dairy, and plant?based beverages; teas and coffees; and energy drinks. It also offers concentrates, syrups, beverage bases, source waters, and powders/minerals, as well as fountain syrups to fountain retailers, such as restaurants and convenience stores. The company sells its products primarily under the Coca-Cola, Diet Coke/Coca-Cola Light, Coca-Cola Zero Sugar, Fanta, Sprite, Minute Maid, Georgia, Powerade, Del Valle, Schweppes, Aquarius, Minute Maid Pulpy, Dasani, Simply, Glacéau Vitaminwater, Gold Peak, FUZE TEA, Glacéau Smartwater, Ice Dew, I LOHAS, and Ayataka brand names. The Coca-Cola Company offers its beverage products through a network of company-owned or controlled bottling and distribution operators, as well as through independent bottling partners, distributors, wholesalers, and retailers. The company was founded in 1886 and is headquartered in Atlanta, Georgia.

About Cott

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.

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