Contrasting PepsiCo (NASDAQ:PEP) & Compania Cervecerias Unidas (NYSE:CCU)

Compania Cervecerias Unidas (NYSE:CCU) and PepsiCo (NASDAQ:PEP) are both consumer staples companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, earnings, profitability, institutional ownership and valuation.

Volatility and Risk

Compania Cervecerias Unidas has a beta of 0.51, meaning that its stock price is 49% less volatile than the S&P 500. Comparatively, PepsiCo has a beta of 0.31, meaning that its stock price is 69% less volatile than the S&P 500.

Valuation and Earnings

This table compares Compania Cervecerias Unidas and PepsiCo”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Compania Cervecerias Unidas	$3,041.12 billion	0.00	$128.87 million	$0.62	17.37
PepsiCo	$93.92 billion	2.11	$8.24 billion	$7.96	18.27

PepsiCo has lower revenue, but higher earnings than Compania Cervecerias Unidas. Compania Cervecerias Unidas is trading at a lower price-to-earnings ratio than PepsiCo, indicating that it is currently the more affordable of the two stocks.

Dividends

Compania Cervecerias Unidas pays an annual dividend of $0.15 per share and has a dividend yield of 1.4%. PepsiCo pays an annual dividend of $5.92 per share and has a dividend yield of 4.1%. Compania Cervecerias Unidas pays out 24.2% of its earnings in the form of a dividend. PepsiCo pays out 74.4% 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. PepsiCo has raised its dividend for 54 consecutive years. PepsiCo is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

24.1% of Compania Cervecerias Unidas shares are owned by institutional investors. Comparatively, 73.1% of PepsiCo shares are owned by institutional investors. 8.4% of Compania Cervecerias Unidas shares are owned by company insiders. Comparatively, 0.1% of PepsiCo shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Compania Cervecerias Unidas and PepsiCo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Compania Cervecerias Unidas	3.60%	6.68%	3.01%
PepsiCo	11.09%	53.08%	10.42%

Analyst Ratings

This is a summary of recent recommendations for Compania Cervecerias Unidas and PepsiCo, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Compania Cervecerias Unidas	3	1	0	0	1.25
PepsiCo	1	14	4	1	2.25

Compania Cervecerias Unidas currently has a consensus target price of $11.50, indicating a potential upside of 6.81%. PepsiCo has a consensus target price of $143.28, indicating a potential downside of 1.49%. Given Compania Cervecerias Unidas’ higher possible upside, equities research analysts clearly believe Compania Cervecerias Unidas is more favorable than PepsiCo.

Summary

PepsiCo beats Compania Cervecerias Unidas on 13 of the 18 factors compared between the two stocks.

About Compania Cervecerias Unidas

Compañía Cervecerías Unidas S.A. (CCU) is a Chilean beverage company founded in 1902. It produces, markets and distributes a range of alcoholic and non-alcoholic beverages, including beer, soft drinks, bottled water, juices, energy drinks, wine and spirits. CCU sells products under its own brands and through partnerships with international beverage companies. Its beer portfolio includes brands such as Cristal and Escudo, alongside beers produced or distributed under license. The company operates across several South American markets, including Chile, Argentina, Bolivia, Colombia, Paraguay and Uruguay.

About PepsiCo

PepsiCo, Inc. is a global food and beverage company that develops, manufactures, markets and distributes a broad range of products. Its portfolio includes snacks such as Lay’s, Doritos and Cheetos, as well as beverages including Pepsi, Gatorade and Mountain Dew. The company was formed in 1965 through the merger of Pepsi-Cola and Frito-Lay. Its products are sold in more than 200 countries and territories through retail, food-service and other distribution channels. PepsiCo is headquartered in Purchase, New York.