Bunge (NYSE: BG) and Dean Foods (NYSE:DF) are both non-cyclical consumer goods & services companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, valuation, profitability, risk, dividends, earnings and institutional ownership.

Risk & Volatility

Bunge has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500. Comparatively, Dean Foods has a beta of 0.53, meaning that its share price is 47% less volatile than the S&P 500.

Profitability

This table compares Bunge and Dean Foods’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bunge 1.06% 6.68% 2.26%
Dean Foods -0.51% -6.60% -1.60%

Valuation & Earnings

This table compares Bunge and Dean Foods’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bunge $42.94 billion 0.22 $745.00 million $3.27 20.53
Dean Foods $7.71 billion 0.14 $119.92 million $0.34 33.97

Bunge has higher revenue and earnings than Dean Foods. Bunge is trading at a lower price-to-earnings ratio than Dean Foods, 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 Bunge and Dean Foods, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bunge 0 5 3 0 2.38
Dean Foods 2 6 3 0 2.09

Bunge presently has a consensus target price of $81.86, indicating a potential upside of 21.92%. Dean Foods has a consensus target price of $13.06, indicating a potential upside of 13.04%. Given Bunge’s stronger consensus rating and higher possible upside, analysts plainly believe Bunge is more favorable than Dean Foods.

Institutional & Insider Ownership

79.9% of Bunge shares are held by institutional investors. Comparatively, 94.4% of Dean Foods shares are held by institutional investors. 1.3% of Bunge shares are held by company insiders. Comparatively, 1.2% of Dean Foods shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

Bunge pays an annual dividend of $1.84 per share and has a dividend yield of 2.7%. Dean Foods pays an annual dividend of $0.36 per share and has a dividend yield of 3.1%. Bunge pays out 56.3% of its earnings in the form of a dividend. Dean Foods pays out 105.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Dean Foods has increased its dividend for 15 consecutive years. Dean Foods is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Bunge beats Dean Foods on 13 of the 16 factors compared between the two stocks.

Bunge Company Profile

Bunge Limited is an agribusiness and food company with integrated operations that stretch from the farm field to consumer foods. The Company operates through five segments: Agribusiness, Edible Oil Products, Milling Products, Sugar and Bioenergy, and Fertilizer. Its Agribusiness segment is an integrated, global business involved in the purchase, storage, transport, processing and sale of agricultural commodities and commodity products. Its edible oil products include packaged and bulk oils, shortenings, margarines, mayonnaise and other products derived from the vegetable oil refining process. Its milling products segment includes the production and sale of a range of wheat flours and bakery mixes. The Company is a producer and exporter of sugar. Through the Company’s operations in Argentina, it produces, blends and distributes a range of nitrogen, phosphate and potassium (NPK) fertilizers, including phosphate-based liquid and solid nitrogen fertilizers.

Dean Foods Company Profile

Dean Foods Company is a food and beverage company. The Company processes and distributes fluid milk, and other dairy and dairy case products in the United States. It is engaged in manufacturing, marketing, selling and distributing a range of branded and private label dairy and dairy case products. It offers branded and private label dairy case products, including fluid milk, ice cream, cultured dairy products, creamers, ice cream mix and other dairy products to retailers, distributors, foodservice outlets, educational institutions and governmental entities across the United States. It also offers juices, teas and bottled water. As of December 31, 2016, the Company had over 50 national, regional and local dairy brands, as well as private labels. As of December 31, 2016, the Company’s national, local and regional licensed brands included Alta Dena, Hygeia, PET, Arctic Splash, Jilbert, Pog, Barbers Dairy, Purity, Berkeley Farms, Land-O-Sun & design and ReadyLeaf, Broughton.

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