Coca-Cola Consolidated (NASDAQ:COKE) & Primo Brands (NYSE:PRMB) Critical Analysis

Primo Brands (NYSE:PRMB) and Coca-Cola Consolidated (NASDAQ:COKE) are both large-cap consumer staples companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, profitability, institutional ownership, risk, dividends and earnings.

Risk & Volatility

Primo Brands has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500. Comparatively, Coca-Cola Consolidated has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500.

Dividends

Primo Brands pays an annual dividend of $0.45 per share and has a dividend yield of 1.3%. Coca-Cola Consolidated pays an annual dividend of $10.00 per share and has a dividend yield of 0.7%. Primo Brands pays out 28.0% of its earnings in the form of a dividend. Coca-Cola Consolidated pays out 17.4% 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.

Profitability

This table compares Primo Brands and Coca-Cola Consolidated’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Primo Brands	13.63%	8.80%	3.62%
Coca-Cola Consolidated	7.81%	46.94%	13.27%

Earnings and Valuation

This table compares Primo Brands and Coca-Cola Consolidated”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Primo Brands	$1.77 billion	7.17	$238.10 million	$1.61	20.82
Coca-Cola Consolidated	$6.65 billion	1.80	$408.38 million	$57.46	23.77

Coca-Cola Consolidated has higher revenue and earnings than Primo Brands. Primo Brands is trading at a lower price-to-earnings ratio than Coca-Cola Consolidated, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations for Primo Brands and Coca-Cola Consolidated, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Primo Brands	0	0	4	0	3.00
Coca-Cola Consolidated	0	0	0	0	0.00

Primo Brands currently has a consensus target price of $37.75, suggesting a potential upside of 12.64%. Given Primo Brands’ stronger consensus rating and higher probable upside, analysts clearly believe Primo Brands is more favorable than Coca-Cola Consolidated.

Insider and Institutional Ownership

87.7% of Primo Brands shares are owned by institutional investors. Comparatively, 48.2% of Coca-Cola Consolidated shares are owned by institutional investors. 2.5% of Primo Brands shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Primo Brands beats Coca-Cola Consolidated on 9 of the 16 factors compared between the two stocks.

About Primo Brands

Primo Water Corporation is a leading pure-play water solutions provider in North America and Europe. Primo operates largely under a recurring razor/razorblade revenue model. The razor in Primo’s revenue model is its industry leading line-up of sleek and innovative water dispensers, which are sold through major retailers and online at various price points or leased to customers. The dispensers help increase household penetration, which drives recurring purchases of Primo’s razorblade offering. Primo’s razorblade offering is comprised of Water Direct, Water Exchange, and Water Refill. Primo’s water solutions expand consumer access to purified, spring and mineral water to promote a healthier, more sustainable lifestyle while simultaneously reducing plastic waste and pollution. Primo is committed to its water stewardship standards and is proud to partner with the International Bottled Water Association in North America as well as with Watercoolers Europe.

About Coca-Cola Consolidated

Coca-Cola Consolidated, Inc., together with its subsidiaries, manufactures, markets, and distributes nonalcoholic beverages primarily products of The Coca-Cola Company in the United States. The company offers sparkling beverages; and still beverages, including energy products, as well as noncarbonated beverages comprising bottled water, ready to drink coffee and tea, enhanced water, juices, and sports drinks. It also sells its products to other Coca-Cola bottlers; and post-mix products that are dispensed through equipment, which mixes the fountain syrups with carbonated or still water enabling fountain retailers to sell finished products to consumers in cups or glasses. In addition, the company manufactures and distributes various other beverage brands that include Dr Pepper and Monster Energy. It sells and distributes its products directly to grocery stores, mass merchandise stores, club stores, convenience stores, and drug stores; and restaurants, schools, amusement parks, and recreational facilities, as well as through vending machine outlets. The company was formerly known as Coca-Cola Bottling Co. Consolidated and changed its name to Coca-Cola Consolidated, Inc. in January 2019. Coca-Cola Consolidated, Inc. was incorporated in 1980 and is headquartered in Charlotte, North Carolina.