Critical Survey: Coca-Cola Company (The) (KO) & Primo Water Corporation (PRMW)
Coca-Cola Company (The) (NYSE: KO) and Primo Water Corporation (NASDAQ:PRMW) are both consumer staples companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, profitabiliy and dividends.
Earnings & Valuation
This table compares Coca-Cola Company (The) and Primo Water Corporation’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Coca-Cola Company (The)||$40.70 billion||4.73||$11.24 billion||$1.43||31.49|
|Primo Water Corporation||$170.98 million||2.32||$18.98 million||($0.60)||-22.15|
Coca-Cola Company (The) has higher revenue and earnings than Primo Water Corporation. Primo Water Corporation is trading at a lower price-to-earnings ratio than Coca-Cola Company (The), indicating that it is currently the more affordable of the two stocks.
This table compares Coca-Cola Company (The) and Primo Water Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Coca-Cola Company (The)||15.30%||33.17%||8.99%|
|Primo Water Corporation||-11.02%||-38.63%||-7.94%|
Institutional and Insider Ownership
64.6% of Coca-Cola Company (The) shares are owned by institutional investors. Comparatively, 60.3% of Primo Water Corporation shares are owned by institutional investors. 1.5% of Coca-Cola Company (The) shares are owned by insiders. Comparatively, 15.8% of Primo Water Corporation 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.
Coca-Cola Company (The) pays an annual dividend of $1.48 per share and has a dividend yield of 3.3%. Primo Water Corporation does not pay a dividend. Coca-Cola Company (The) pays out 103.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Coca-Cola Company (The) has increased its dividend for 54 consecutive years.
This is a summary of recent recommendations for Coca-Cola Company (The) and Primo Water Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Coca-Cola Company (The)||2||13||7||0||2.23|
|Primo Water Corporation||0||1||3||0||2.75|
Coca-Cola Company (The) presently has a consensus price target of $44.56, indicating a potential downside of 1.05%. Primo Water Corporation has a consensus price target of $17.38, indicating a potential upside of 30.74%. Given Primo Water Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe Primo Water Corporation is more favorable than Coca-Cola Company (The).
Risk and Volatility
Coca-Cola Company (The) has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500. Comparatively, Primo Water Corporation has a beta of -0.39, meaning that its stock price is 139% less volatile than the S&P 500.
Coca-Cola Company (The) beats Primo Water Corporation on 12 of the 16 factors compared between the two stocks.
About Coca-Cola Company (The)
The Coca-Cola Company is a beverage company. The Company owns or licenses and markets non-alcoholic beverage brands, primarily sparkling beverages and a range of still beverages, such as waters, flavored waters and enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, sports drinks, dairy and energy drinks. The Company’s segments include Europe, Middle East and Africa; Latin America; North America; Asia Pacific; Bottling Investments, and Corporate. The Company owns and markets a range of non-alcoholic sparkling beverage brands, including Coca-Cola, Diet Coke, Fanta and Sprite. The Company owns or licenses and markets over 500 non-alcoholic beverage brands. The Company markets, manufactures and sells beverage concentrates, which are referred to as beverage bases, and syrups, including fountain syrups, and finished sparkling and still beverages.
About Primo Water Corporation
Primo Water Corporation (Primo) provides multi-gallon purified bottled water, self-service refill water and water dispensers. The Company’s products are sold through various retailers in the United States and Canada. It operates through two segments: Primo Water (Water) and Primo Dispensers (Dispensers). The Water segment consists of the sale of multi-gallon purified bottled water (Exchange) and its self-service filtered drinking water (Refill). The Dispensers segment sells water dispensers that are designed to dispense Primo and other dispenser-compatible bottled water. As of December 31, 2016, its products were offered in the United States and in Canada at over 46,000 combined retail locations. Exchange and Refill provide consumers the ability of either exchanging empty bottles and purchasing full bottles or refilling the empty bottles at any participating retailer. The Company sources three- and five-gallon water bottles from various independent vendors for use in Exchange.
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