Critical Review: Nestle (OTCMKTS:NSRGY) versus WD-40 (NASDAQ:WDFC)

WD-40 (NASDAQ:WDFC) and Nestle (OTCMKTS:NSRGY) are both consumer staples companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.

Earnings and Valuation

This table compares WD-40 and Nestle”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WD-40	$619.99 million	4.40	$90.99 million	$6.68	30.19
Nestle	$103.78 billion	2.47	$12.36 billion	N/A	N/A

Nestle has higher revenue and earnings than WD-40.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for WD-40 and Nestle, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WD-40	0	1	1	0	2.50
Nestle	1	3	1	0	2.00

WD-40 presently has a consensus target price of $300.00, indicating a potential upside of 48.76%. Nestle has a consensus target price of $91.00, indicating a potential downside of 8.48%. Given WD-40’s stronger consensus rating and higher possible upside, equities analysts clearly believe WD-40 is more favorable than Nestle.

Dividends

WD-40 pays an annual dividend of $4.08 per share and has a dividend yield of 2.0%. Nestle pays an annual dividend of $2.37 per share and has a dividend yield of 2.4%. WD-40 pays out 61.1% of its earnings in the form of a dividend. WD-40 has increased its dividend for 17 consecutive years.

Institutional and Insider Ownership

91.5% of WD-40 shares are owned by institutional investors. Comparatively, 0.6% of Nestle shares are owned by institutional investors. 0.8% of WD-40 shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Risk and Volatility

WD-40 has a beta of 0.16, indicating that its stock price is 84% less volatile than the S&P 500. Comparatively, Nestle has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500.

Profitability

This table compares WD-40 and Nestle’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WD-40	14.68%	31.84%	17.22%
Nestle	N/A	N/A	N/A

Summary

WD-40 beats Nestle on 9 of the 14 factors compared between the two stocks.

About WD-40

WD-40 Company develops and sells maintenance products, and homecare and cleaning products in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company provides multi-purpose maintenance products that include aerosol sprays, non-aerosol trigger sprays, precision pens, and in liquid-bulk form products under the WD-40 Multi-Use brand name; specialty maintenance products, such as penetrants, degreasers, corrosion inhibitors, greases, lubricants, and rust removers under the WD-40 Specialist brand; and bike-specific products. It also offers multi-purpose and specialty drip oils, and spray lubricant products, as well as other specialty maintenance products under the 3-IN-ONE brand name; and professional spray maintenance products and lubricants for the bike maintenance market under the GT85 brand name. In addition, the company provides automatic toilet bowl cleaners under the 2000 Flushes brand name; aerosol and liquid trigger carpet stain and odor eliminators under the Spot Shot brand; room and rug deodorizers under the Carpet Fresh brand name; carpet and household cleaners, and rug and room deodorizers under the 1001 brand; heavy-duty hand cleaner products under the Lava brand name in the United States, as well as under the Solvol brand name in Australia; and automatic toilet bowl cleaners under the X-14 brand name. It sells its products primarily through warehouse club stores, hardware stores, automotive parts outlets, industrial distributors and suppliers, mass retail and home center stores, value retailers, grocery stores, online retailers, farm supply, sport retailers, and independent bike dealers. WD-40 Company was founded in 1953 and is headquartered in San Diego, California.

About Nestle

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.