Nestle (OTCMKTS:NSRGY) & BJ’s Wholesale Club (NYSE:BJ) Critical Analysis

BJ’s Wholesale Club (NYSE:BJ) and Nestle (OTCMKTS:NSRGY) are both large-cap consumer staples companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, earnings, profitability, dividends, valuation and analyst recommendations.

Analyst Ratings

This is a summary of current recommendations and price targets for BJ’s Wholesale Club and Nestle, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BJ’s Wholesale Club	1	10	9	0	2.40
Nestle	1	2	1	0	2.00

BJ’s Wholesale Club currently has a consensus target price of $107.63, suggesting a potential upside of 8.04%. Nestle has a consensus target price of $91.00, suggesting a potential downside of 4.62%. Given BJ’s Wholesale Club’s stronger consensus rating and higher possible upside, equities research analysts plainly believe BJ’s Wholesale Club is more favorable than Nestle.

Volatility & Risk

BJ’s Wholesale Club has a beta of 0.36, indicating that its stock price is 64% less volatile than the S&P 500. Comparatively, Nestle has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500.

Institutional & Insider Ownership

98.6% of BJ’s Wholesale Club shares are held by institutional investors. Comparatively, 0.6% of Nestle shares are held by institutional investors. 1.4% of BJ’s Wholesale Club shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares BJ’s Wholesale Club and Nestle’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BJ’s Wholesale Club	2.70%	27.55%	7.90%
Nestle	N/A	N/A	N/A

Valuation & Earnings

This table compares BJ’s Wholesale Club and Nestle”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BJ’s Wholesale Club	$21.46 billion	0.60	$578.38 million	$4.38	22.74
Nestle	$107.99 billion	2.28	$10.90 billion	N/A	N/A

Nestle has higher revenue and earnings than BJ’s Wholesale Club.

Summary

BJ’s Wholesale Club beats Nestle on 8 of the 12 factors compared between the two stocks.

About BJ’s Wholesale Club

BJ’s Wholesale Club Holdings, Inc. engages in the operation of membership warehouse clubs. Its product categories include grocery, household and pet, television and electronics, furniture, computer and tablets, patio and outdoor living, lawn and garden, baby and kids, toys, home, health and beauty, appliances, and jewelry. The company was founded in 1984 and is headquartered in Marlborough, MA.

About Nestle

Nestlé S.A., together with its subsidiaries, operates as a food and beverage company. The company operates through Zone North America; Zone Europe; Zone Asia, Oceania, and Africa; Zone Latin America; Zone Greater China; Nespresso; and Nestlé Health Science segments. It offers baby foods under the Cerelac, Gerber, Nido, and NaturNes brands; bottled water under the Nestlé Pure Life, Perrier, Vittel, Buxton, Erikli, and S.Pellegrino brands; cereals under the Fitness, Nesquik, cheerios, and Lion Cereals brands; and chocolate and confectionery products under the KitKat, Smarties, Aero, Nestlé Les Recettes de l'Atelier, Milkybar, Baci Perugina, Quality Street, and Fitness brands. The company provides coffee products under the Nescafé, Nespresso, Nescafé Dolce Gusto, Starbucks Coffee At Home, and Blue Bottle Coffee brands; culinary, chilled, and frozen foods under the Maggi, DiGiorno, Thomy, Garden Gourmet, Sweet Earth, Hot Pockets, Stouffer's, Buitoni, Lean, and Life Cuisine brands; dairy products under the Carnation, Nido, Bear, Coffee-Mate, and La Laitière brands; and drinks under the Nesquik, Nestea, Nescafé, and Milo brands. In addition, it offers food service products under the Milo, Nescafé, Maggi, Chef, Nestea, Stouffer's, Chef-Mate, Minor's, and Lean Cuisine brand names; healthcare nutrition products under the Boost, Garden of Life, Nature's Bounty, Persona, Vital Proteins, Solgar, Peptamen, Resource, Vitaflo, Impact, and Compleat brands; ice cream products under the Movenpick, Häagen-Dazs, Nestlé Ice Cream, and Extrême brands; and pet care products under the Purina, ONE, Alpo, Felix, Pro Plan, Cat Chow, Fancy Feast, Bakers, Friskies, Dog Chow, Beneful, and Gourmet brands. The company was founded in 1866 and is headquartered in Vevey, Switzerland.