Unilever NV (NYSE: UN) and Colgate-Palmolive (NYSE:CL) are both large-cap consumer staples companies, but which is the better investment? We will compare the two businesses based on the strength of their profitabiliy, risk, analyst recommendations, earnings, valuation, dividends and institutional ownership.

Analyst Recommendations

This is a summary of current ratings and target prices for Unilever NV and Colgate-Palmolive, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Unilever NV 0 2 5 0 2.71
Colgate-Palmolive 0 10 2 0 2.17

Colgate-Palmolive has a consensus target price of $74.80, suggesting a potential upside of 4.27%. Given Colgate-Palmolive’s higher possible upside, analysts plainly believe Colgate-Palmolive is more favorable than Unilever NV.

Valuation and Earnings

This table compares Unilever NV and Colgate-Palmolive’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Unilever NV $62.97 billion 2.61 $11.26 billion N/A N/A
Colgate-Palmolive $15.18 billion 4.16 $4.42 billion $2.69 26.67

Unilever NV has higher revenue and earnings than Colgate-Palmolive.

Dividends

Unilever NV pays an annual dividend of $1.41 per share and has a dividend yield of 2.4%. Colgate-Palmolive pays an annual dividend of $1.60 per share and has a dividend yield of 2.2%. Colgate-Palmolive pays out 59.5% of its earnings in the form of a dividend. Unilever NV has increased its dividend for 53 consecutive years. Unilever NV is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Unilever NV has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500. Comparatively, Colgate-Palmolive has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500.

Profitability

This table compares Unilever NV and Colgate-Palmolive’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Unilever NV N/A N/A N/A
Colgate-Palmolive 15.83% 3,121.95% 20.57%

Insider and Institutional Ownership

9.2% of Unilever NV shares are held by institutional investors. Comparatively, 73.9% of Colgate-Palmolive shares are held by institutional investors. 1.0% of Colgate-Palmolive shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Unilever NV beats Colgate-Palmolive on 8 of the 15 factors compared between the two stocks.

Unilever NV Company Profile

Unilever N.V. is a fast-moving consumer goods (FMCG) company. The Company’s segments include Personal Care, which primarily includes sales of skin care and hair care products, deodorants and oral care products; Foods, which primarily includes sales of soups, bouillons, sauces, snacks, mayonnaise, salad dressings, margarines and spreads; Home Care, which primarily includes sales of home care products, such as powders, liquids and capsules, soap bars and a range of cleaning products, and Refreshment, which primarily includes sales of ice cream and tea-based beverages. The Company’s geographical segments include Asia/AMET/RUB, The Americas and Europe. Its brands include Axe, Dirt is Good (Omo), Dove, Family Goodness (Rama), Heartbrand (Wall’s), Hellmann’s, Knorr, Lipton, Lux, Magnum, Rexona, Sunsilk and Surf. The Company operates in more than 100 countries, selling its products in more than 190 countries. The Company operates approximately 310 factories in over 70 countries.

Colgate-Palmolive Company Profile

Colgate-Palmolive Company (Colgate) is a consumer products company. The Company operates in two product segments: Oral, Personal and Home Care, and Pet Nutrition. The Oral, Personal and Home Care product segment is operated through five geographic segments, which include North America, Latin America, Europe, Asia Pacific and Africa/Eurasia. The Company’s oral care products include Colgate Total, Colgate Sensitive Pro-Relief, Colgate Max Fresh and Colgate Optic White. The Company is also engaged in various product categories of the personal care market with operations in liquid hand soap, which it sells under the Palmolive, Protex and Softsoap brands. The Company manufactures and markets a range of products for the home care market, including Palmolive and Ajax dishwashing liquids, Fabuloso and Ajax household cleaners and Murphy’s Oil Soap. The Company, through its Hill’s Pet Nutrition segment (Hill’s), manufactures pet nutrition products for dogs and cats.

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