Reviewing Molson Coors Beverage (NYSE:TAP) and Diageo (NYSE:DEO)

Molson Coors Beverage (NYSE:TAP) and Diageo (NYSE:DEO) are both consumer staples companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, dividends, risk and institutional ownership.

Valuation & Earnings

This table compares Molson Coors Beverage and Diageo”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Molson Coors Beverage	$11.21 billion	0.83	$1.12 billion	($10.68)	-4.39
Diageo	$20.25 billion	2.64	$2.35 billion	N/A	N/A

Diageo has higher revenue and earnings than Molson Coors Beverage.

Volatility and Risk

Molson Coors Beverage has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500. Comparatively, Diageo has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Molson Coors Beverage and Diageo, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Molson Coors Beverage	2	9	6	0	2.24
Diageo	3	3	4	0	2.10

Molson Coors Beverage presently has a consensus target price of $54.56, indicating a potential upside of 16.29%. Diageo has a consensus target price of $119.00, indicating a potential upside of 23.80%. Given Diageo’s higher possible upside, analysts clearly believe Diageo is more favorable than Molson Coors Beverage.

Profitability

This table compares Molson Coors Beverage and Diageo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Molson Coors Beverage	7.81%	8.61%	4.39%
Diageo	N/A	N/A	N/A

Dividends

Molson Coors Beverage pays an annual dividend of $1.88 per share and has a dividend yield of 4.0%. Diageo pays an annual dividend of $4.95 per share and has a dividend yield of 5.1%. Molson Coors Beverage pays out -17.6% of its earnings in the form of a dividend. Molson Coors Beverage has increased its dividend for 4 consecutive years.

Institutional and Insider Ownership

78.5% of Molson Coors Beverage shares are held by institutional investors. Comparatively, 9.0% of Diageo shares are held by institutional investors. 2.7% of Molson Coors Beverage shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Molson Coors Beverage beats Diageo on 10 of the 15 factors compared between the two stocks.

About Molson Coors Beverage

Molson Coors Beverage Company manufactures, markets, and sells beer and other malt beverage products under various brands in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company offers flavored malt beverages including hard seltzers, craft, spirits and energy, and ready to drink beverages. It provides its products under Aspall Cider, Blue Moon, Coors Original, Five Trail, Hop Valley brands, Leinenkugel’s, Madri, Miller Genuine Draft, Molson Ultra, Sharp’s, Staropramen, and Vizzy Hard Seltzer above premier brands; Bergenbier, Borsodi, Carling, Coors Banquet, Coors Light, Jelen, Kamenitza, Miller Lite, Molson Canadian, and Niksicko, Ozujsko under the premium brands; and Branik, Icehouse, Keystone, Miller High Life, Milwaukee’s Best, and Steel Reserve under the economy brands. The company was formerly known as Molson Coors Brewing Company and changed its name to Molson Coors Beverage Company in January 2020. Molson Coors Beverage Company was founded in 1774 and is based in Golden, Colorado.

About Diageo

Diageo plc, together with its subsidiaries, engages in the production, marketing, and sale of alcoholic beverages. The company offers scotch, gin, vodka, rum, raki, liqueur, wine, tequila, Chinese white spirits, cachaça, and brandy, as well as beer, including cider and flavored malt beverages. It also provides Chinese, Canadian, Irish, American, and Indian-Made Foreign Liquor whiskies, as well as flavored malt beverages, ready to drink, and non-alcoholic products. The company provides its products under the Johnnie Walker, Crown Royal, J&B, Buchanan’s, Smirnoff, Cîroc, Ketel One, Captain Morgan, Baileys, Don Julio, Casamigos, Tanqueray, Guinness, Shui Jing Fang, Yenì, McDowell’s, Don Papa, Aviation American, Seagram, Seagram’s 7 Crown, Zacapa, Black Dog, Black & White, Signature, Royal Challenge, Godawan, Antiquity, Gordon’s, Old Parr, Windsor, Bundaberg, Ypióca, Bulleit, and Bell’s brand names. It operates in the United States, the United Kingdom, Türkiye, Australia, Korea, India, Greater China, Brazil, Mexico, South Africa, Nigeria, and internationally. The company was incorporated in 1886 and is headquartered in London, the United Kingdom.