Nestlé vs Coca-Cola

Nestlé and Coca-Cola are two of the world's largest and most recognizable consumer goods companies, known for their iconic brands and global presence. Both companies have a long history of delivering strong financial performance and dividends to shareholders. However, they operate in different sectors of the market, with Nestlé focusing on food and beverages, while Coca-Cola specializes in non-alcoholic beverages. Investors often compare the two companies' stocks to determine which offers a better investment opportunity.

Nestlé or Coca-Cola?

When comparing Nestlé and Coca-Cola, 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 Nestlé and Coca-Cola.

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. Nestlé has a dividend yield of 6.01%, while Coca-Cola has a dividend yield of 3.41%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Nestlé reports a 5-year dividend growth of 6.70% year and a payout ratio of 69.76%. On the other hand, Coca-Cola reports a 5-year dividend growth of 3.36% year and a payout ratio of 75.57%.

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 Nestlé P/E ratio at 19.64 and Coca-Cola's P/E ratio at 28.46. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Nestlé P/B ratio is 6.69 while Coca-Cola's P/B ratio is 11.72.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Nestlé has seen a 5-year revenue growth of 0.15%, while Coca-Cola's is 0.31%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Nestlé's ROE at 32.67% and Coca-Cola's ROE at 40.74%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $97.43 for Nestlé and $69.48 for Coca-Cola. Over the past year, Nestlé's prices ranged from $96.36 to $117.55, with a yearly change of 21.99%. Coca-Cola's prices fluctuated between $52.84 and $73.53, with a yearly change of 39.16%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.