Financial Review: Danone (DANOY) versus Blue Buffalo Pet Products (BUFF)

Danone (OTCMKTS: DANOY) and Blue Buffalo Pet Products (NASDAQ:BUFF) are both consumer staples companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, dividends, risk, profitability and earnings.

Earnings & Valuation

This table compares Danone and Blue Buffalo Pet Products’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Danone $4.00 billion 11.90 $2.77 billion $0.88 17.55
Blue Buffalo Pet Products $1.27 billion 6.14 $193.52 million $0.95 42.11

Danone has higher revenue and earnings than Blue Buffalo Pet Products. Danone is trading at a lower price-to-earnings ratio than Blue Buffalo Pet Products, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and price targets for Danone and Blue Buffalo Pet Products, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Danone 0 4 1 0 2.20
Blue Buffalo Pet Products 2 7 5 0 2.21

Blue Buffalo Pet Products has a consensus price target of $34.64, indicating a potential downside of 13.41%. Given Blue Buffalo Pet Products’ stronger consensus rating and higher probable upside, analysts clearly believe Blue Buffalo Pet Products is more favorable than Danone.

Volatility and Risk

Danone has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500. Comparatively, Blue Buffalo Pet Products has a beta of 1.38, suggesting that its stock price is 38% more volatile than the S&P 500.

Profitability

This table compares Danone and Blue Buffalo Pet Products’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Danone N/A N/A N/A
Blue Buffalo Pet Products 15.18% 77.83% 24.37%

Insider and Institutional Ownership

0.4% of Danone shares are owned by institutional investors. Comparatively, 94.6% of Blue Buffalo Pet Products shares are owned by institutional investors. 1.0% of Danone shares are owned by insiders. Comparatively, 7.7% of Blue Buffalo Pet Products shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Danone pays an annual dividend of $0.37 per share and has a dividend yield of 2.4%. Blue Buffalo Pet Products does not pay a dividend. Danone pays out 42.0% of its earnings in the form of a dividend.

Summary

Blue Buffalo Pet Products beats Danone on 12 of the 16 factors compared between the two stocks.

About Danone

Danone SA operates in the food and beverage industry worldwide. The company operates through four segments: EDP International, EDP Noram, Specialized Nutrition, and Waters. It offers yogurts under the Danone, Activia, DanActiv, Danimals, Dannon, Danonino, Happy Family, Horizon Organic, Light & Fit, Oikos, YoCrunch, and Danio brands; and almond and soy milk, ice creams and novelties, and powdered proteins under the Silk, So Delicious, Vega, and Alpro brands. The company also provides coffee creamers and beverages under the Delight, Magicow, Dunkin Donuts, Land O Lakes, and SToK brands; and milk, cheese, organic snacks, and other organic dairy products under the Horizon brand; desserts under the Danette and Danissimo brands; and packaged salads and green vegetables, and fresh and frozen organic fruits, and vegetables under the Earthbound Farm brand. In addition, it offers specialized nutrition products for infants and young children to complement breast feeding under the Aptamil, Nutrilon, Cow & Gate, Blédina, Bebelac, Malyutka, and Dumex brands. Further, the company provides oral and tube feeding products for the dietary treatment of babies and children; liquid oral nutritional supplements; and hypoallergenic products for babies and children with dairy or multiple food protein allergies primarily under the Nutricia brand. Additionally, it offers packaged natural, flavored, and vitamin-enriched water; and fruit juices and vitamins under the evian, Volvic, Badoit, Aqua, Mizone, Bonafont, Villavicencio, Villa del Sur, Fontvella, Lanjarón, and Zywiec Zdroj brands. The company also markets its products under the Actimel, Tema, Taillefine, Ser, and Les 2 Vaches brands. It distributes its products through retail chains and traditional market outlets; hospitals, clinics, and pharmacies; and e-commerce. The company was formerly known as Groupe Danone and changed its name to Danone SA in April 2009. Danone SA was founded in 1899 and is based in Paris, France.

About Blue Buffalo Pet Products

Blue Buffalo Pet Products, Inc., through its subsidiary, Blue Buffalo Company, Ltd., operates as a pet food company in the United States, Canada, Japan, and Mexico. It develops, produces, markets, and sells dog and cat food under the BLUE Life Protection Formula, BLUE Wilderness, BLUE Basics, BLUE Freedom, and BLUE Natural Veterinary Diet lines. The company sells its products to retail partners and distributors in specialty channels, including national pet superstore chains, regional pet store chains, neighborhood pet stores, farm and feed stores, e-commerce retailers, military outlets, hardware stores, and veterinary clinics and hospitals. Blue Buffalo Pet Products, Inc. was founded in 2002 and is headquartered in Wilton, Connecticut.

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