Brown-Forman (NYSE: BF.A) and Diageo plc (NYSE:DEO) are both large-cap non-cyclical consumer goods & services companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, profitabiliy, dividends, earnings and analyst recommendations.

Dividends

Brown-Forman pays an annual dividend of $0.73 per share. Diageo plc does not pay a dividend. Brown-Forman pays out 27.8% of its earnings in the form of a dividend. Diageo plc has raised its dividend for 5 consecutive years.

Insider and Institutional Ownership

6.7% of Brown-Forman shares are held by institutional investors. 26.9% of Brown-Forman shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Brown-Forman and Diageo plc’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Brown-Forman 22.52% 59.18% 15.67%
Diageo plc 25.51% 34.76% 11.13%

Valuation & Earnings

This table compares Brown-Forman and Diageo plc’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Brown-Forman N/A N/A N/A $2.63 N/A
Diageo plc $14.48 billion 5.18 $4.64 billion N/A N/A

Diageo plc has higher revenue and earnings than Brown-Forman.

Analyst Ratings

This is a summary of recent recommendations and price targets for Brown-Forman and Diageo plc, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Brown-Forman 1 0 0 0 1.00
Diageo plc 3 3 5 0 2.18

Diageo plc has a consensus price target of $120.00, suggesting a potential upside of 0.38%.

Summary

Diageo plc beats Brown-Forman on 6 of the 11 factors compared between the two stocks.

Brown-Forman Company Profile

Brown-Forman Corporation is a spirit and wine company. The Company manufactures, bottles, imports, exports, markets and sells a range of alcoholic beverages. The Company has a portfolio of approximately 40 spirit, wine and ready-to-drink cocktail (RTD) brands. Its principal brands include Jack Daniel’s Tennessee Whiskey, Jack Daniel’s RTDs, Jack Daniel’s Tennessee Honey, Gentleman Jack Rare Tennessee Whiskey, Jack Daniel’s Tennessee Fire, Jack Daniel’s Single Barrel Collection, Jack Daniel’s Sinatra Select, Jack Daniel’s Winter Jack, Jack Daniel’s No. 27 Gold Tennessee Whiskey, Finlandia Vodkas, Finlandia RTDs, Korbel California Brandy, Woodford Reserve Kentucky Bourbons, el Jimador Tequilas, el Jimador New Mix RTDs, Herradura Tequilas, Canadian Mist Canadian Whisky, Sonoma-Cutrer California Wines, Early Times Kentucky Whisky and Bourbon, Chambord Liqueur, Old Forester Kentucky Bourbon, Antiguo Tequila, Pepe Lopez Tequila, Santa Dose Cachaca and Collingwood Canadian Whisky.

Diageo plc Company Profile

Diageo PLC is an alcoholic beverage company. The Company operates in various categories, including spirits and beer. Its geographic segments include North America; Europe, Russia and Turkey; Africa; Latin America and Caribbean, and Asia Pacific. Its principal products includes Scotch whisky, Gin, Vodka, Rum, Beer, Irish Cream Liqueur, Wine, Raki, Tequila, Canadian Whisky, American Whiskey, Progressive Adult Beverages, Cachaca, Brandy and Ready to Drink. The Company’s brands includes Johnnie Walker, Smirnoff, Captain Morgan, Baileys, Tanqueray and Guinness. It manages its operations from various locations, including the United Kingdom; Ireland; Italy; Turkey; the United States; Canada; Brazil; Mexico; Australia; Singapore; India; Nigeria; South Africa; East Africa, and Africa Regional Markets. It also produces a range of ready to drink products mainly in the United Kingdom, Italy, South Africa, Australia, the United States and Canada.

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