Mars vs Nestlé Which Is a Smarter Choice?

Mars and Nestlé are two prominent companies in the global food and beverage industry, each with a long history of success and innovation. In recent years, their stock performance has been closely watched by investors and analysts alike. Mars, a privately held company, is known for its iconic brands like M&M's and Snickers. Nestlé, a publicly traded corporation, is a multinational powerhouse with a diverse portfolio of products. Comparing the performance of their stocks provides valuable insights into the financial health and future prospects of these industry giants.

Mars or Nestlé?

When comparing Mars 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 Mars 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. Mars has a dividend yield of 4.44%, while Nestlé has a dividend yield of 4.07%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Mars reports a 5-year dividend growth of 16.12% year and a payout ratio of 31.68%. On the other hand, Nestlé reports a 5-year dividend growth of 4.73% 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 Mars P/E ratio at 6.36 and Nestlé's P/E ratio at 17.43. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Mars P/B ratio is 0.70 while Nestlé's P/B ratio is 5.94.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Mars has seen a 5-year revenue growth of 0.45%, while Nestlé's is 0.16%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Mars's ROE at 11.67% and Nestlé's ROE at 32.67%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ¥3140.00 for Mars and $83.66 for Nestlé. Over the past year, Mars's prices ranged from ¥2328.00 to ¥3960.00, with a yearly change of 70.10%. Nestlé's prices fluctuated between $83.66 and $117.55, with a yearly change of 40.51%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.