Analyzing CocaCola (NYSE:KO) and Anheuser-Busch InBev SA/NV (NYSE:BUD)

Anheuser-Busch InBev SA/NV (NYSE:BUD) and CocaCola (NYSE:KO) are both large-cap consumer staples companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, profitability, dividends, institutional ownership, risk and earnings.

Analyst Ratings

This is a summary of current recommendations and price targets for Anheuser-Busch InBev SA/NV and CocaCola, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Anheuser-Busch InBev SA/NV	0	6	11	0	2.65
CocaCola	0	3	14	1	2.89

Anheuser-Busch InBev SA/NV presently has a consensus target price of $91.08, suggesting a potential upside of 16.41%. CocaCola has a consensus target price of $95.76, suggesting a potential upside of 8.42%. Given Anheuser-Busch InBev SA/NV’s higher probable upside, research analysts clearly believe Anheuser-Busch InBev SA/NV is more favorable than CocaCola.

Valuation and Earnings

This table compares Anheuser-Busch InBev SA/NV and CocaCola”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Anheuser-Busch InBev SA/NV	$59.32 billion	2.66	$6.84 billion	$4.72	16.58
CocaCola	$47.94 billion	7.93	$13.11 billion	$3.33	26.52

CocaCola has lower revenue, but higher earnings than Anheuser-Busch InBev SA/NV. Anheuser-Busch InBev SA/NV is trading at a lower price-to-earnings ratio than CocaCola, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Anheuser-Busch InBev SA/NV and CocaCola’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Anheuser-Busch InBev SA/NV	14.90%	16.42%	7.47%
CocaCola	28.56%	39.38%	13.18%

Volatility & Risk

Anheuser-Busch InBev SA/NV has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500. Comparatively, CocaCola has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500.

Dividends

Anheuser-Busch InBev SA/NV pays an annual dividend of $1.41 per share and has a dividend yield of 1.8%. CocaCola pays an annual dividend of $2.12 per share and has a dividend yield of 2.4%. Anheuser-Busch InBev SA/NV pays out 29.9% of its earnings in the form of a dividend. CocaCola pays out 63.7% 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. CocaCola has raised its dividend for 64 consecutive years. CocaCola is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

5.5% of Anheuser-Busch InBev SA/NV shares are held by institutional investors. Comparatively, 70.3% of CocaCola shares are held by institutional investors. 4.5% of Anheuser-Busch InBev SA/NV shares are held by company insiders. Comparatively, 0.9% of CocaCola shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

CocaCola beats Anheuser-Busch InBev SA/NV on 12 of the 18 factors compared between the two stocks.

About Anheuser-Busch InBev SA/NV

Anheuser-Busch InBev SA/NV produces, distributes, exports, markets, and sells beer and beverages. It offers a portfolio of approximately 500 beer brands, which primarily include Budweiser, Corona, and Stella Artois; Beck's, Hoegaarden, Leffe, and Michelob Ultra; and Aguila, Antarctica, Bud Light, Brahma, Cass, Castle, Castle Lite, Cristal, Harbin, Jupiler, Modelo Especial, Quilmes, Victoria, Sedrin, and Skol brands. The company operates in North America, Middle America, South America, Europe, the Middle East, Africa, and the Asia Pacific. The company was founded in 1366 and is headquartered in Leuven, Belgium.

About CocaCola

The Coca-Cola Company, a beverage company, manufactures, markets, and sells various nonalcoholic beverages worldwide. The company provides sparkling soft drinks, sparkling flavors; water, sports, coffee, and tea; juice, value-added dairy, and plant-based beverages; and other beverages. It also offers beverage concentrates and syrups, as well as fountain syrups to fountain retailers, such as restaurants and convenience stores. The company sells its products under the Coca-Cola, Diet Coke/Coca-Cola Light, Coca-Cola Zero Sugar, caffeine free Diet Coke, Cherry Coke, Fanta Orange, Fanta Zero Orange, Fanta Zero Sugar, Fanta Apple, Sprite, Sprite Zero Sugar, Simply Orange, Simply Apple, Simply Grapefruit, Fresca, Schweppes, Thums Up, Aquarius, Ayataka, BODYARMOR, Ciel, Costa, Dasani, dogadan, FUZE TEA, Georgia, glacéau smartwater, glacéau vitaminwater, Gold Peak, Ice Dew, I LOHAS, Powerade, Topo Chico, AdeS, Del Valle, fairlife, innocent, Minute Maid, and Minute Maid Pulpy brands. It operates through a network of independent bottling partners, distributors, wholesalers, and retailers, as well as through bottling and distribution operators. The company was founded in 1886 and is headquartered in Atlanta, Georgia.