Nestlé (OTCMKTS:NSRGF) & Premium Brands (OTCMKTS:PRBZF) Head-To-Head Review

Nestlé (OTCMKTS:NSRGF) and Premium Brands (OTCMKTS:PRBZF) are both consumer defensive companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, institutional ownership, valuation and profitability.

Dividends

Nestlé pays an annual dividend of $2.15 per share and has a dividend yield of 2.5%. Premium Brands pays an annual dividend of $1.25 per share and has a dividend yield of 2.2%. Nestlé pays out 72.2% of its earnings in the form of a dividend. Premium Brands pays out 246.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Nestlé is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of recent recommendations for Nestlé and Premium Brands, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nestlé	0	0	0	0	0.00
Premium Brands	0	2	1	0	2.33

Premium Brands has a consensus target price of $103.67, indicating a potential upside of 82.67%. Given Premium Brands’ stronger consensus rating and higher possible upside, analysts plainly believe Premium Brands is more favorable than Nestlé.

Profitability

This table compares Nestlé and Premium Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nestlé	N/A	N/A	N/A
Premium Brands	N/A	N/A	N/A

Institutional and Insider Ownership

27.2% of Nestlé shares are held by institutional investors. Comparatively, 33.5% of Premium Brands shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Nestlé and Premium Brands”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nestlé	N/A	N/A	N/A	$2.98	28.91
Premium Brands	N/A	N/A	N/A	$0.51	111.95

Nestlé is trading at a lower price-to-earnings ratio than Premium Brands, indicating that it is currently the more affordable of the two stocks.

Summary

Premium Brands beats Nestlé on 5 of the 8 factors compared between the two stocks.

About Nestlé

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.

About Premium Brands

Premium Brands Holdings Corporation, through its subsidiaries, manufactures and distributes food products primarily in Canada and the United States. It operates in two segments, Specialty Foods and Premium Food Distribution. The company provides processed meat, deli products, meat snacks, beef jerky and halal, sandwiches, pastries, specialty and gourmet products, entrees, panini, wraps, subs, hamburgers, burgers, salads and kettle products, muffins, breads, pastas, pizza, and baking and sushi products. It is also involved in the distribution of food products, including meat and seafood products; operation of retail/convenience store and concessionary; and provision of seafood processing services. The company operates under the brand names Harvest Meats, Hempler's, Piller's, Grimm's Fine Foods, Freybe, Isernio's, Expresco, SJ Fine Foods, McSweeney's, Made Rite, Direct Plus, Oberto, Belmont Meats, Conte Foods, SK Food Group, Hygaard, Quality Fast Foods, HQ Fine Foods, Creekside Custom Foods, Stuyver's, Bread Garden Express, and Duso's, as well as Gourmet Chef, Island City Baking, Skilcor, Leadbetter's, Concord Meats, Mclean Meats, Buddy's Kitchen, Raybern's, Leonetti's, Partner's Crackers, Shaw Crackers, Country Prime Meats, Lou's Kitchen, Yorkshire Valley Farms, Golden Valley Farms, Maid-Rite, King's Command Foods, etc. The company was founded in 1917 and is based in Richmond, Canada.