Dean Foods (NYSE: DF) and Hershey Company (The) (NYSE:HSY) are both consumer staples companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, analyst recommendations, risk, institutional ownership, dividends, valuation and earnings.
Insider and Institutional Ownership
51.4% of Hershey Company (The) shares are held by institutional investors. 1.2% of Dean Foods shares are held by company insiders. Comparatively, 0.9% of Hershey Company (The) shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Earnings & Valuation
This table compares Dean Foods and Hershey Company (The)’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Dean Foods||$7.91 billion||0.12||$376.23 million||$0.60||17.60|
|Hershey Company (The)||$7.52 billion||3.13||$1.72 billion||$3.14||35.33|
Hershey Company (The) has higher revenue, but lower earnings than Dean Foods. Dean Foods is trading at a lower price-to-earnings ratio than Hershey Company (The), indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Dean Foods has a beta of 0.51, suggesting that its share price is 49% less volatile than the S&P 500. Comparatively, Hershey Company (The) has a beta of 0.39, suggesting that its share price is 61% less volatile than the S&P 500.
This is a breakdown of current ratings and price targets for Dean Foods and Hershey Company (The), as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hershey Company (The)||1||8||4||0||2.23|
Dean Foods presently has a consensus price target of $14.67, indicating a potential upside of 38.89%. Hershey Company (The) has a consensus price target of $111.54, indicating a potential upside of 0.54%. Given Dean Foods’ higher possible upside, equities analysts plainly believe Dean Foods is more favorable than Hershey Company (The).
Dean Foods pays an annual dividend of $0.36 per share and has a dividend yield of 3.4%. Hershey Company (The) pays an annual dividend of $2.62 per share and has a dividend yield of 2.4%. Dean Foods pays out 60.0% of its earnings in the form of a dividend. Hershey Company (The) pays out 83.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hershey Company (The) has raised its dividend for 7 consecutive years. Dean Foods is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Dean Foods and Hershey Company (The)’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Hershey Company (The)||8.95%||119.66%||18.88%|
Hershey Company (The) beats Dean Foods on 11 of the 17 factors compared between the two stocks.
About Dean Foods
Dean Foods Company is a food and beverage company. The Company processes and distributes fluid milk, and other dairy and dairy case products in the United States. It is engaged in manufacturing, marketing, selling and distributing a range of branded and private label dairy and dairy case products. It offers branded and private label dairy case products, including fluid milk, ice cream, cultured dairy products, creamers, ice cream mix and other dairy products to retailers, distributors, foodservice outlets, educational institutions and governmental entities across the United States. It also offers juices, teas and bottled water. As of December 31, 2016, the Company had over 50 national, regional and local dairy brands, as well as private labels. As of December 31, 2016, the Company’s national, local and regional licensed brands included Alta Dena, Hygeia, PET, Arctic Splash, Jilbert, Pog, Barbers Dairy, Purity, Berkeley Farms, Land-O-Sun & design and ReadyLeaf, Broughton.
About Hershey Company (The)
The Hershey Company is a producer of chocolate in North America. The Company’s principal product offerings include chocolate and non-chocolate confectionery products; gum and mint refreshment products; pantry items, such as baking ingredients and beverages, and snack items, such as spreads, meat snacks, bars and snack bites and mixes. Its segments include North America, and International and Other. The North America segment includes its chocolate and non-chocolate confectionery business, as well as its grocery and snacks business. This includes developing and growing its business in chocolate and non-chocolate confectionery, pantry, food service and other snacking product lines. The Company distributes and sells confectionery products in export markets of Asia, Latin America, the Middle East, Europe, Africa and other regions. As of December 31, 2016, the Company marketed, sold and distributed its products under more than 80 brand names in approximately 70 countries across the world.
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