Financial Review: Nestlé (NSRGY) vs. Campbell Soup (CPB)

Nestlé (OTCMKTS: NSRGY) and Campbell Soup (NYSE:CPB) are both large-cap consumer staples companies, but which is the better business? We will compare the two companies based on the strength of their earnings, analyst recommendations, profitability, risk, valuation, institutional ownership and dividends.

Profitability

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

Net Margins Return on Equity Return on Assets
Nestlé N/A N/A N/A
Campbell Soup 5.97% 56.59% 9.87%

Dividends

Nestlé pays an annual dividend of $2.03 per share and has a dividend yield of 2.7%. Campbell Soup pays an annual dividend of $1.40 per share and has a dividend yield of 3.4%. Nestlé pays out 59.5% of its earnings in the form of a dividend. Campbell Soup pays out 46.1% 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. Campbell Soup has increased its dividend for 2 consecutive years. Campbell Soup is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Nestlé and Campbell Soup, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nestlé 0 1 1 0 2.50
Campbell Soup 8 5 1 0 1.50

Campbell Soup has a consensus price target of $39.62, indicating a potential downside of 4.10%. Given Campbell Soup’s higher probable upside, analysts clearly believe Campbell Soup is more favorable than Nestlé.

Earnings & Valuation

This table compares Nestlé and Campbell Soup’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nestlé $91.22 billion 2.59 $7.30 billion $3.41 22.23
Campbell Soup $7.89 billion 1.57 $887.00 million $3.04 13.59

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

Volatility and Risk

Nestlé has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500. Comparatively, Campbell Soup has a beta of 0.3, suggesting that its stock price is 70% less volatile than the S&P 500.

Insider and Institutional Ownership

1.4% of Nestlé shares are held by institutional investors. Comparatively, 48.7% of Campbell Soup shares are held by institutional investors. 37.2% of Campbell Soup shares are held by company 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.

Summary

Campbell Soup beats Nestlé on 9 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.

Campbell Soup Company Profile

Campbell Soup Company, together with its subsidiaries, manufactures and markets branded food and beverage products. It operates through three segments: Americas Simple Meals and Beverages, Global Biscuits and Snacks, and Campbell Fresh. The Americas Simple Meals and Beverages segment engages in the retail and food service of Campbell's condensed and ready-to-serve soups; Swanson broth and stocks; Prego pasta sauces; Pace Mexican sauces; Campbell's gravies, pastas, beans, and dinner sauces; Swanson canned poultry products; Plum food and snack products; V8 juices and beverages; and Campbell's tomato juices in the United States, Canada, and Latin America. The Global Biscuits and Snacks segment provides Pepperidge Farm cookies, crackers, bakery and frozen products in the United States retail; Arnott's biscuits in Australia and Asia Pacific; and Kelsen cookies worldwide, as well as simple meals and shelf-stable beverages in Australia and the Asia Pacific. The Campbell Fresh segment offers Bolthouse Farms fresh carrots, carrot ingredients, refrigerated beverages and refrigerated salad dressings; Garden Fresh Gourmet salsa, hummus, dips, and tortilla chips in the United States; and refrigerated soups. The company sells its products through retail food chains, mass discounters and merchandisers, club stores, convenience stores, drug stores, and dollar stores, as well as other retail, commercial, and non-commercial establishments; and independent contractor distributors. Campbell Soup Company was founded in 1869 and is headquartered in Camden, New Jersey.

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