Head-To-Head Review: Premium Brands (OTCMKTS:PRBZF) and Nestlé (OTCMKTS:NSRGF)

Premium Brands (OTCMKTS:PRBZF) and Nestlé (OTCMKTS:NSRGF) are both consumer defensive companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, risk, profitability, valuation and earnings.

Insider & Institutional Ownership

33.5% of Premium Brands shares are held by institutional investors. Comparatively, 27.2% of Nestlé shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Premium Brands and Nestlé, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Premium Brands	0	2	1	0	2.33
Nestlé	0	0	0	0	0.00

Premium Brands presently has a consensus target price of $103.67, suggesting a potential upside of 82.67%. Given Premium Brands’ stronger consensus rating and higher probable upside, equities analysts clearly believe Premium Brands is more favorable than Nestlé.

Profitability

This table compares Premium Brands and Nestlé’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Premium Brands	N/A	N/A	N/A
Nestlé	N/A	N/A	N/A

Dividends

Premium Brands pays an annual dividend of $1.25 per share and has a dividend yield of 2.2%. Nestlé pays an annual dividend of $2.15 per share and has a dividend yield of 2.6%. Premium Brands pays out 246.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Nestlé pays out 72.2% of its earnings in the form of a dividend. Nestlé is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Premium Brands and Nestlé”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Premium Brands	N/A	N/A	N/A	$0.51	111.95
Nestlé	N/A	N/A	N/A	$2.98	27.87

Nestlé is trading at a lower price-to-earnings ratio than Premium Brands, indicating that it is currently the more affordable of the two stocks.

Summary

Premium Brands beats Nestlé on 5 of the 8 factors compared between the two stocks.

About Premium Brands

Premium Brands Holdings Corporation, through its subsidiaries, manufactures and distributes food products primarily in Canada and the United States. It operates in two segments, Specialty Foods and Premium Food Distribution. The company provides processed meat, deli products, meat snacks, beef jerky and halal, sandwiches, pastries, specialty and gourmet products, entrees, panini, wraps, subs, hamburgers, burgers, salads and kettle products, muffins, breads, pastas, pizza, and baking and sushi products. It is also involved in the distribution of food products, including meat and seafood products; operation of retail/convenience store and concessionary; and provision of seafood processing services. The company operates under the brand names Harvest Meats, Hempler's, Piller's, Grimm's Fine Foods, Freybe, Isernio's, Expresco, SJ Fine Foods, McSweeney's, Made Rite, Direct Plus, Oberto, Belmont Meats, Conte Foods, SK Food Group, Hygaard, Quality Fast Foods, HQ Fine Foods, Creekside Custom Foods, Stuyver's, Bread Garden Express, and Duso's, as well as Gourmet Chef, Island City Baking, Skilcor, Leadbetter's, Concord Meats, Mclean Meats, Buddy's Kitchen, Raybern's, Leonetti's, Partner's Crackers, Shaw Crackers, Country Prime Meats, Lou's Kitchen, Yorkshire Valley Farms, Golden Valley Farms, Maid-Rite, King's Command Foods, etc. The company was founded in 1917 and is based in Richmond, Canada.

About Nestlé

Nestlé S.A., together with its subsidiaries, operates as a food and beverage company. The company operates through Zone North America; Zone Europe; Zone Asia, Oceania, and Africa; Zone Latin America; Zone Greater China; Nespresso; and Nestlé Health Science segments. It offers baby foods under the Cerelac, Gerber, Nido, and NaturNes brands; bottled water under the Nestlé Pure Life, Perrier, Vittel, Buxton, Erikli, and S.Pellegrino brands; cereals under the Fitness, Nesquik, cheerios, and Lion Cereals brands; and chocolate and confectionery products under the KitKat, Smarties, Aero, Nestlé Les Recettes de l'Atelier, Milkybar, Baci Perugina, Quality Street, and Fitness brands. The company provides coffee products under the Nescafé, Nespresso, Nescafé Dolce Gusto, Starbucks Coffee At Home, and Blue Bottle Coffee brands; culinary, chilled, and frozen foods under the Maggi, DiGiorno, Thomy, Garden Gourmet, Sweet Earth, Hot Pockets, Stouffer's, Buitoni, Lean, and Life Cuisine brands; dairy products under the Carnation, Nido, Bear, Coffee-Mate, and La Laitière brands; and drinks under the Nesquik, Nestea, Nescafé, and Milo brands. In addition, it offers food service products under the Milo, Nescafé, Maggi, Chef, Nestea, Stouffer's, Chef-Mate, Minor's, and Lean Cuisine brand names; healthcare nutrition products under the Boost, Garden of Life, Nature's Bounty, Persona, Vital Proteins, Solgar, Peptamen, Resource, Vitaflo, Impact, and Compleat brands; ice cream products under the Movenpick, Häagen-Dazs, Nestlé Ice Cream, and Extrême brands; and pet care products under the Purina, ONE, Alpo, Felix, Pro Plan, Cat Chow, Fancy Feast, Bakers, Friskies, Dog Chow, Beneful, and Gourmet brands. The company was founded in 1866 and is headquartered in Vevey, Switzerland.