Cosan (NYSE: CZZ) and Hershey (NYSE:HSY) are both basic materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, earnings, profitability, dividends, analyst recommendations, valuation and institutional ownership.
This table compares Cosan and Hershey’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
25.9% of Cosan shares are owned by institutional investors. Comparatively, 54.0% of Hershey shares are owned by institutional investors. 0.9% of Hershey shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Risk & Volatility
Cosan has a beta of 2.34, indicating that its share price is 134% more volatile than the S&P 500. Comparatively, Hershey has a beta of 0.34, indicating that its share price is 66% less volatile than the S&P 500.
Cosan pays an annual dividend of $0.08 per share and has a dividend yield of 1.0%. Hershey pays an annual dividend of $2.62 per share and has a dividend yield of 2.8%. Cosan pays out 12.5% of its earnings in the form of a dividend. Hershey pays out 55.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Hershey has increased its dividend for 8 consecutive years. Hershey is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings & Valuation
This table compares Cosan and Hershey’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Cosan||$4.26 billion||0.46||$172.57 million||$0.64||12.53|
|Hershey||$7.52 billion||2.57||$782.98 million||$4.76||19.36|
Hershey has higher revenue and earnings than Cosan. Cosan is trading at a lower price-to-earnings ratio than Hershey, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings and price targets for Cosan and Hershey, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Cosan presently has a consensus price target of $13.00, indicating a potential upside of 62.09%. Hershey has a consensus price target of $102.44, indicating a potential upside of 11.18%. Given Cosan’s stronger consensus rating and higher possible upside, research analysts clearly believe Cosan is more favorable than Hershey.
Hershey beats Cosan on 13 of the 17 factors compared between the two stocks.
Cosan Limited, together with its subsidiaries, engages in fuel and natural gas distribution, logistics, lubricant, sugar and ethanol, and fuel businesses primarily in Brazil and internationally. The company's Raízen Energia segment produces and markets various products derived from sugar cane, including raw sugar, and anhydrous and hydrated ethanol. This segment is also involved in activities related to energy cogeneration from sugarcane bagasse; and holds interests in companies involved in research and development on new technology. Its Raízen Combustíveis segment distributes and markets fuels, primarily through a franchised network of service stations under the Shell brand in Brazil. The company's COMGÁS segment distributes piped natural gas to customers in the industrial, residential, commercial, automotive, thermogeneration, and cogeneration sectors in part of the State of Sao Paulo. Its Cosan Logística segment provides logistics services for transport, storage, and port loading of commodities, primarily for sugar products; and leasing or lending of locomotives, wagons, and other railway equipment. The company's Lubricants segment produces and distributes lubricants under the Mobil brand and Comma name. Cosan Limited operates a network of approximately 6,000 Shell service stations and 960 convenience stores, as well as 67 distribution terminals and 64 airport terminals. The company was incorporated in 2007 and is based in São Paulo, Brazil.
The Hershey Company, together with its subsidiaries, manufactures and sells confectionery products. The company operates through two segments, North America; and International and Other. It offers chocolate and non-chocolate confectionery products; gum and mint refreshment products comprising mints, chewing gums, and bubble gums; pantry items, such as baking ingredients, toppings, beverages, and sundae syrups; and snack items, including spreads, meat snacks, bars and snack bites, mixes, popcorn and protein bars, and cookies. The company provides its products primarily under the Hershey's, Reese's, Kisses, Jolly Rancher, Almond Joy, Brookside, barkTHINS, Cadbury, Good & Plenty, Heath, Kit Kat, Lancaster, Payday, Rolo, Twizzlers, Whoppers, York, Scharffen Berger, Dagoba, Ice Breakers, Breathsavers, and Bubble Yum brands, as well as under the Golden Monkey, Munching Monkey, Pelon Pelo Rico, IO-IO, Nutrine, Maha Lacto, Jumpin, Sofit, SkinnyPop, Oatmega, Paqui, and Tyrrells brands. It markets and sells its products to wholesale distributors, chain grocery stores, mass merchandisers, chain drug stores, vending companies, wholesale clubs, convenience stores, dollar stores, concessionaires, and department stores. The Hershey Company was founded in 1894 and is headquartered in Hershey, Pennsylvania.
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