Head to Head Review: Brown Forman (NYSE:BF.A) vs. Compania Cervecerias Unidas (NYSE:CCU)

Brown Forman (NYSE:BF.A) and Compania Cervecerias Unidas (NYSE:CCU) are both consumer staples companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, dividends, valuation and earnings.

Valuation and Earnings

This table compares Brown Forman and Compania Cervecerias Unidas”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Brown Forman	$3.98 billion	3.14	$869.00 million	$2.12	12.84
Compania Cervecerias Unidas	$3.06 billion	0.73	$128.87 million	$0.67	18.16

Brown Forman has higher revenue and earnings than Compania Cervecerias Unidas. Brown Forman is trading at a lower price-to-earnings ratio than Compania Cervecerias Unidas, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations for Brown Forman and Compania Cervecerias Unidas, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Brown Forman	0	0	0	0	0.00
Compania Cervecerias Unidas	3	2	0	0	1.40

Compania Cervecerias Unidas has a consensus target price of $12.00, suggesting a potential downside of 1.40%. Given Compania Cervecerias Unidas’ stronger consensus rating and higher possible upside, analysts plainly believe Compania Cervecerias Unidas is more favorable than Brown Forman.

Profitability

This table compares Brown Forman and Compania Cervecerias Unidas’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Brown Forman	20.64%	19.93%	9.85%
Compania Cervecerias Unidas	4.03%	7.20%	3.20%

Insider and Institutional Ownership

3.8% of Brown Forman shares are held by institutional investors. Comparatively, 24.1% of Compania Cervecerias Unidas shares are held by institutional investors. 4.0% of Brown Forman shares are held by company insiders. Comparatively, 8.4% of Compania Cervecerias Unidas shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

Brown Forman has a beta of 0.4, suggesting that its stock price is 60% less volatile than the S&P 500. Comparatively, Compania Cervecerias Unidas has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500.

Dividends

Brown Forman pays an annual dividend of $0.92 per share and has a dividend yield of 3.4%. Compania Cervecerias Unidas pays an annual dividend of $0.22 per share and has a dividend yield of 1.8%. Brown Forman pays out 43.4% of its earnings in the form of a dividend. Compania Cervecerias Unidas pays out 32.8% 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.

Summary

Brown Forman beats Compania Cervecerias Unidas on 8 of the 15 factors compared between the two stocks.

About Brown Forman

Brown-Forman Corporation manufactures, bottles, imports, exports, markets, and sells various alcoholic beverages. It provides spirits, wines, whiskey spirits, whiskey-based flavored liqueurs, ready-to-drink and ready-to-pour products, ready-to-drink cocktails, vodkas, tequilas, champagnes, brandy, bourbons, and liqueurs. The company offers its products primarily under the Jack Daniel's, Woodford Reserve, Canadian Mist, GlenDronach, BenRiach, Glenglassaugh, Old Forester, Early Times, Slane Irish Whiskey, Coopers' Craft, el Jimador, Herradura, New Mix, Pepe Lopez, Antiguo, Finlandia, Korbel Champagne, and Sonoma-Cutrer brands. It is also involved in the sale of used barrels, bulk whiskey, and wine; and provision of contract bottling services. The company serves retail customers and consumers through distributors or state governments; and retailers, wholesalers, and provincial governments directly. It has operations in the United States, the United Kingdom, Germany, Australia, Mexico, and internationally. Brown-Forman Corporation was founded in 1870 and is headquartered in Louisville, Kentucky.

About Compania Cervecerias Unidas

Compañía Cervecerías Unidas S.A. operates as a beverage company in Chile, Argentina, Bolivia, Colombia, Paraguay, and Uruguay. The company operates through three segments: Chile, International Business, and Wine. It produces and sells alcoholic and non-alcoholic beer under proprietary and licensed brands, as well as distributes Pernod Ricard products in non-supermarket retail stores. The company also produces and sells non-alcoholic beverages, including carbonated soft drinks, nectars and juices, sports and energy drinks, and ice tea; and mineral, purified, and flavored bottled water, as well as ready-to-mix products with instant powder drinks. In addition, it is involved in the production and distribution of pisco, cocktails, rum, flavored alcoholic beverages, gin, and cider. The company serves small and medium-sized retail outlets; retail establishments, such as restaurants, hotels, and bars; wholesalers; and supermarket chains. It also exports its products to Europe, Latin America, the United States, Canada, Asia, Oceania, and internationally. The company was founded in 1850 and is based in Santiago, Chile. Compañía Cervecerías Unidas S.A. is a subsidiary of Inversiones y Rentas S.A.