Head-To-Head Review: Luckin Coffee (OTCMKTS:LKNCY) vs. Coca-Cola (NYSE:KO)

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Luckin Coffee and Coca-Cola, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Luckin Coffee	0	0	1	3	3.75
Coca-Cola	0	3	20	1	2.92

Luckin Coffee currently has a consensus price target of $46.87, indicating a potential upside of 27.11%. Coca-Cola has a consensus price target of $97.26, indicating a potential downside of 0.34%. Given Luckin Coffee’s stronger consensus rating and higher probable upside, research analysts clearly believe Luckin Coffee is more favorable than Coca-Cola.

Insider & Institutional Ownership

0.5% of Luckin Coffee shares are held by institutional investors. Comparatively, 70.3% of Coca-Cola shares are held by institutional investors. 2.7% of Luckin Coffee shares are held by company insiders. Comparatively, 0.9% of Coca-Cola shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Luckin Coffee and Coca-Cola”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Luckin Coffee	$7.03 billion	1.50	$513.88 million	$2.00	18.43
Coca-Cola	$51.05 billion	8.22	$13.11 billion	$3.40	28.70

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

Risk and Volatility

Luckin Coffee has a beta of -0.32, indicating that its stock price is 132% less volatile than the S&P 500. Comparatively, Coca-Cola has a beta of 0.28, indicating that its stock price is 72% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Luckin Coffee	7.51%	26.98%	13.10%
Coca-Cola	28.65%	38.79%	13.50%

Summary

Coca-Cola beats Luckin Coffee on 11 of the 15 factors compared between the two stocks.

About Luckin Coffee

Luckin Coffee is a Chinese coffeehouse company founded in 2017. It operates a technology-driven retail business, using mobile ordering and a network of stores to serve customers through pickup and delivery. The company’s offerings include freshly brewed coffee, tea and other beverages, along with selected food items. Its menu and promotions are designed for convenient, frequent purchases through its app and other digital channels. Luckin Coffee primarily serves customers in China and has also expanded into Singapore.

About Coca-Cola

The Coca-Cola Company (NYSE: KO) is a global beverage company headquartered in Atlanta, Georgia. Founded in 1886, it is best known for Coca-Cola, one of the world’s most recognized soft drink brands. The company owns, licenses, and markets a broad portfolio of beverages, including sparkling soft drinks, water, sports drinks, coffee, tea, juice, dairy and plant-based beverages, and energy drinks. Its brands include Coca-Cola, Diet Coke, Coca-Cola Zero Sugar, Sprite, Fanta, Dasani, smartwater, Powerade, Minute Maid, Simply, fairlife, and Costa Coffee, among others.