Head to Head Comparison: Flowers Foods (FLO) and Nestlé (NSRGY)

Flowers Foods (NYSE: FLO) and Nestlé (OTCMKTS:NSRGY) are both consumer staples companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, analyst recommendations, risk, dividends and valuation.

Analyst Recommendations

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This is a breakdown of recent ratings and recommmendations for Flowers Foods and Nestlé, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Flowers Foods 0 5 3 0 2.38
Nestlé 0 2 0 0 2.00

Flowers Foods presently has a consensus price target of $22.25, suggesting a potential downside of 0.13%. Given Flowers Foods’ stronger consensus rating and higher possible upside, research analysts plainly believe Flowers Foods is more favorable than Nestlé.

Risk & Volatility

Flowers Foods has a beta of 0.67, indicating that its share price is 33% less volatile than the S&P 500. Comparatively, Nestlé has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500.

Institutional & Insider Ownership

64.0% of Flowers Foods shares are held by institutional investors. Comparatively, 1.4% of Nestlé shares are held by institutional investors. 15.2% of Flowers Foods shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Flowers Foods pays an annual dividend of $0.68 per share and has a dividend yield of 3.1%. Nestlé pays an annual dividend of $2.12 per share and has a dividend yield of 2.8%. Flowers Foods pays out 76.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Nestlé pays out 62.2% of its earnings in the form of a dividend. Flowers Foods has raised its dividend for 12 consecutive years. Flowers Foods is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Flowers Foods and Nestlé’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Flowers Foods 3.83% 15.17% 6.95%
Nestlé N/A N/A N/A

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Flowers Foods $3.92 billion 1.20 $150.12 million $0.89 25.03
Nestlé $91.22 billion 2.62 $7.30 billion $3.41 22.49

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

Summary

Flowers Foods beats Nestlé on 12 of the 17 factors compared between the two stocks.

About Flowers Foods

Flowers Foods, Inc. produces and markets bakery products in the United States. It operates through two segments, Direct-Store-Delivery (DSD) and Warehouse Delivery. The DSD segment produces and markets fresh breads, buns, rolls, tortillas, and snack cakes. This segment offers its products primarily under the Nature's Own, Wonder, Cobblestone Bread Company, Tastykake, and Dave's Killer Bread brand names. It operates 39 bakeries, as well as sells its products through a network of independent distributors to retail and foodservice customers. The Warehouse Delivery segment produces snack cakes, frozen breads, and rolls for national retail, foodservice, vending, and co-pack customers through a network of warehouse channels. This segment markets its products under the Mrs. Freshley's, Alpine Valley Bread, and European Bakers brand names. It also sells products under franchised and licensed trademarks and trade names, such as Sunbeam, Bunny, and Sara Lee. The company was formerly known as Flowers Industries and changed its name to Flowers Foods, Inc. in 2001. Flowers Foods, Inc. was founded in 1919 and is headquartered in Thomasville, Georgia.

About Nestlé

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.

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