Head to Head Comparison: General Mills (GIS) vs. Hershey Company (The) (HSY)
General Mills (NYSE: GIS) and Hershey Company (The) (NYSE:HSY) are both large-cap consumer staples companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.
Valuation and Earnings
This table compares General Mills and Hershey Company (The)’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|General Mills||$15.62 billion||1.95||$1.66 billion||$2.79||19.25|
|Hershey Company (The)||$7.44 billion||3.09||$720.04 million||$3.36||32.47|
General Mills has higher revenue and earnings than Hershey Company (The). General Mills is trading at a lower price-to-earnings ratio than Hershey Company (The), indicating that it is currently the more affordable of the two stocks.
This table compares General Mills and Hershey Company (The)’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Hershey Company (The)||9.52%||124.06%||19.16%|
Risk and Volatility
General Mills has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500. Comparatively, Hershey Company (The) has a beta of 0.36, meaning that its stock price is 64% less volatile than the S&P 500.
General Mills pays an annual dividend of $1.96 per share and has a dividend yield of 3.6%. Hershey Company (The) pays an annual dividend of $2.62 per share and has a dividend yield of 2.4%. General Mills pays out 70.3% of its earnings in the form of a dividend. Hershey Company (The) pays out 78.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. General Mills has increased its dividend for 13 consecutive years and Hershey Company (The) has increased its dividend for 7 consecutive years. General Mills is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a summary of current ratings for General Mills and Hershey Company (The), as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hershey Company (The)||1||7||4||0||2.25|
General Mills currently has a consensus target price of $56.27, suggesting a potential upside of 4.74%. Hershey Company (The) has a consensus target price of $114.25, suggesting a potential upside of 4.72%. Given General Mills’ higher possible upside, equities research analysts clearly believe General Mills is more favorable than Hershey Company (The).
Insider and Institutional Ownership
71.3% of General Mills shares are held by institutional investors. Comparatively, 49.2% of Hershey Company (The) shares are held by institutional investors. 1.4% of General Mills shares are held by company insiders. Comparatively, 0.9% of Hershey Company (The) shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
General Mills beats Hershey Company (The) on 10 of the 17 factors compared between the two stocks.
General Mills Company Profile
General Mills, Inc. is a manufacturer and marketer of branded consumer foods sold through retail stores. The Company is a supplier of branded and unbranded food products to the North American foodservice and commercial baking industries. The Company has three segments: U.S. Retail, International, and Convenience Stores and Foodservice. Its products are marketed under various brands, which include Annie’s and Betty Crocker. The Company’s U.S. Retail segment reflects business with a range of grocery stores, mass merchandisers, membership stores, natural food chains, drug, dollar and discount chains, and e-commerce grocery providers operating throughout the United States. The International segment consists of retail and foodservice businesses outside of the United States. The Convenience Stores and Foodservice segment’s product categories include ready-to-eat cereals, snacks, refrigerated yogurt, frozen meals, unbaked and fully baked frozen dough products, and baking mixes.
Hershey Company (The) Company Profile
The Hershey Company is a producer of chocolate in North America. The Company’s principal product offerings include chocolate and non-chocolate confectionery products; gum and mint refreshment products; pantry items, such as baking ingredients and beverages, and snack items, such as spreads, meat snacks, bars and snack bites and mixes. Its segments include North America, and International and Other. The North America segment includes its chocolate and non-chocolate confectionery business, as well as its grocery and snacks business. This includes developing and growing its business in chocolate and non-chocolate confectionery, pantry, food service and other snacking product lines. The Company distributes and sells confectionery products in export markets of Asia, Latin America, the Middle East, Europe, Africa and other regions. As of December 31, 2016, the Company marketed, sold and distributed its products under more than 80 brand names in approximately 70 countries across the world.
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