Compañía Cervecerías Unidas (NYSE:CCU) and Aramark (NYSE:ARMK) are both consumer staples companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, risk, valuation and profitability.
Volatility and Risk
Compañía Cervecerías Unidas has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, Aramark has a beta of 1.88, suggesting that its share price is 88% more volatile than the S&P 500.
Dividends
Compañía Cervecerías Unidas pays an annual dividend of $0.19 per share and has a dividend yield of 1.1%. Aramark pays an annual dividend of $0.44 per share and has a dividend yield of 1.1%. Compañía Cervecerías Unidas pays out 20.4% of its earnings in the form of a dividend. Aramark pays out -258.8% 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. Aramark has raised its dividend for 1 consecutive years. Aramark is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
This table compares Compañía Cervecerías Unidas and Aramark's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Compañía Cervecerías Unidas | 5.32% | 6.80% | 4.06% |
Aramark | -3.60% | -1.48% | -0.30% |
Analyst Ratings
This is a breakdown of current recommendations for Compañía Cervecerías Unidas and Aramark, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Compañía Cervecerías Unidas | 0 | 1 | 0 | 0 | 2.00 |
Aramark | 0 | 9 | 4 | 0 | 2.31 |
Aramark has a consensus target price of $31.4167, indicating a potential downside of 22.68%. Given Aramark's stronger consensus rating and higher probable upside, analysts plainly believe Aramark is more favorable than Compañía Cervecerías Unidas.
Earnings and Valuation
This table compares Compañía Cervecerías Unidas and Aramark's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Compañía Cervecerías Unidas | $2.41 billion | 1.36 | $182.20 million | $0.93 | 19.08 |
Aramark | $12.83 billion | 0.80 | $-461,530,000.00 | ($0.17) | -239.00 |
Compañía Cervecerías Unidas has higher earnings, but lower revenue than Aramark. Aramark is trading at a lower price-to-earnings ratio than Compañía Cervecerías Unidas, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
16.2% of Compañía Cervecerías Unidas shares are held by institutional investors. Comparatively, 93.5% of Aramark shares are held by institutional investors. 8.4% of Compañía Cervecerías Unidas shares are held by company insiders. Comparatively, 10.3% of Aramark shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Summary
Aramark beats Compañía Cervecerías Unidas on 10 of the 17 factors compared between the two stocks.