Coca-Cola vs Nestlé Which Is More Profitable?

Coca-Cola and Nestlé are two of the world's largest and most well-known companies in the food and beverage industry. Both companies have a long history of success and have been reliable investments for many years. However, despite their similarities, Coca-Cola and Nestlé have different business models, products, and strategies that set them apart. Investors may choose to invest in one or both companies based on their financial goals, risk tolerance, and outlook on the industry.

Coca-Cola or Nestlé?

When comparing Coca-Cola and Nestlé, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Coca-Cola and Nestlé.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Coca-Cola has a dividend yield of 3.79%, while Nestlé has a dividend yield of 6.7%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Coca-Cola reports a 5-year dividend growth of 3.36% year and a payout ratio of 78.28%. On the other hand, Nestlé reports a 5-year dividend growth of 6.70% year and a payout ratio of 69.76%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Coca-Cola P/E ratio at 26.24 and Nestlé's P/E ratio at 18.40. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Coca-Cola P/B ratio is 10.30 while Nestlé's P/B ratio is 6.27.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Coca-Cola has seen a 5-year revenue growth of 0.31%, while Nestlé's is 0.15%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Coca-Cola's ROE at 39.75% and Nestlé's ROE at 32.67%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $63.25 for Coca-Cola and $89.56 for Nestlé. Over the past year, Coca-Cola's prices ranged from $56.60 to $73.53, with a yearly change of 29.91%. Nestlé's prices fluctuated between $89.56 and $117.55, with a yearly change of 31.25%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.