Financial Review: Nomad Foods (NYSE:NOMD) vs. General Mills (NYSE:GIS)

Nomad Foods (NYSE:NOMD) and General Mills (NYSE:GIS) are both consumer staples companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.

Profitability

This table compares Nomad Foods and General Mills’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nomad Foods	4.50%	9.83%	3.95%
General Mills	12.05%	19.19%	5.48%

Valuation & Earnings

This table compares Nomad Foods and General Mills”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nomad Foods	$3.03 billion	0.45	$154.66 million	$1.02	9.41
General Mills	$19.49 billion	0.94	$2.30 billion	$4.09	8.38

General Mills has higher revenue and earnings than Nomad Foods. General Mills is trading at a lower price-to-earnings ratio than Nomad Foods, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Nomad Foods has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500. Comparatively, General Mills has a beta of 0.01, suggesting that its stock price is 99% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Nomad Foods and General Mills, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nomad Foods	2	1	3	0	2.17
General Mills	6	11	4	0	1.90

Nomad Foods currently has a consensus target price of $12.50, suggesting a potential upside of 30.28%. General Mills has a consensus target price of $43.22, suggesting a potential upside of 26.14%. Given Nomad Foods’ stronger consensus rating and higher probable upside, analysts clearly believe Nomad Foods is more favorable than General Mills.

Insider and Institutional Ownership

75.3% of Nomad Foods shares are owned by institutional investors. Comparatively, 75.7% of General Mills shares are owned by institutional investors. 0.3% of General Mills shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Nomad Foods pays an annual dividend of $0.68 per share and has a dividend yield of 7.1%. General Mills pays an annual dividend of $2.44 per share and has a dividend yield of 7.1%. Nomad Foods pays out 66.7% of its earnings in the form of a dividend. General Mills pays out 59.7% 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. Nomad Foods has increased its dividend for 2 consecutive years and General Mills has increased its dividend for 5 consecutive years. General Mills is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

General Mills beats Nomad Foods on 13 of the 17 factors compared between the two stocks.

About Nomad Foods

Nomad Foods Limited, together with its subsidiaries, manufactures, markets, and distributes a range of frozen food products in the United Kingdom and internationally. The company offers frozen fish products, including fish fingers, coated fish, and natural fish; ready-to-cook vegetable products, such as peas and spinach; and frozen poultry and meat products comprising nuggets, grills, and burgers. It also provides meal products that include ready-to-cook noodles, pasta, lasagna, pancakes, and other ready-made meals; ice creams, such as in-home and out-of-home ice creams; and other products consisting of soups, pizzas, bakery goods, and meat substitutes. The company sells its products to supermarkets and food retail chains primarily under the Birds Eye, Green Cuisine, iglo, Findus, Aunt Bessie's, Goodfella's, Frikom, Ledo, La Cocinera, and Belviva brand names. Nomad Foods Limited was founded in 2014 and is headquartered in Feltham, the United Kingdom.

About General Mills

General Mills, Inc. manufactures and markets branded consumer foods worldwide. The company operates through four segments: North America Retail; International; Pet; and North America Foodservice. It offers grain, ready-to-eat cereals, refrigerated yogurt, soup, meal kits, refrigerated and frozen dough products, dessert and baking mixes, bakery flour, frozen pizza and pizza snacks, snack bars, fruit and savory snacks, ice cream and frozen desserts, unbaked and fully baked frozen dough products, frozen hot snacks, ethnic meals, side dish mixes, frozen breakfast and entrees, nutrition bars, and frozen and shelf-stable vegetables. The company also manufactures and markets pet food products, including dog and cat food; and operates ice cream parlors. It markets its products under the Annie’s, Betty Crocker, Bisquick, Blue Buffalo, Bugles, Cascadian Farm, Cheerios, Chex, Cinnamon Toast Crunch, Cocoa Puffs, Cookie Crisp, Dunkaroos, Edgard & Cooper, Fiber One, Fruit by the Foot, Fruit Gushers, Fruit Roll-Ups, Gardetto’s, Gold Medal, Golden Grahams, Häagen-Dazs, Kitano, Kix, Lärabar, Latina, Lucky Charms, Muir Glen, Nature Valley, Nudges, Oatmeal Crisp, Old El Paso, Pillsbury, Progresso, Tastefuls, Total, Totino’s , Trix, True Chews, True Solutions, Wanchai Ferry, Wheaties, Wilderness, and Yoki brands. The company sells its products to grocery stores, mass merchandisers, membership stores, natural food chains, drug, dollar and discount chains, e-commerce retailers, commercial and noncommercial foodservice distributors and operators, restaurants, convenience stores, and pet specialty stores. General Mills, Inc. was founded in 1866 and is headquartered in Minneapolis, Minnesota.