Hershey vs Nestlé

Hershey and Nestlé are two major players in the global food industry, renowned for their popular chocolate brands. Both companies have a strong presence in the market and have been delivering consistent financial performance over the years. Investors looking to add food stocks to their portfolio often consider Hershey and Nestlé due to their stability and potential for growth. In this analysis, we will explore the key differences and similarities between Hershey and Nestlé stocks to help investors make informed decisions.

Hershey or Nestlé?

When comparing Hershey 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 Hershey 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. Hershey has a dividend yield of 2.88%, while Nestlé has a dividend yield of 6.05%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Hershey reports a 5-year dividend growth of 10.09% year and a payout ratio of 55.23%. 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 Hershey P/E ratio at 20.22 and Nestlé's P/E ratio at 19.54. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Hershey P/B ratio is 9.31 while Nestlé's P/B ratio is 6.67.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Hershey has seen a 5-year revenue growth of 0.47%, while Nestlé's is 0.15%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Hershey's ROE at 45.62% and Nestlé's ROE at 32.67%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $183.87 for Hershey and $97.11 for Nestlé. Over the past year, Hershey's prices ranged from $178.82 to $211.92, with a yearly change of 18.51%. Nestlé's prices fluctuated between $96.36 and $117.55, with a yearly change of 21.99%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.