DTS8 Coffee (OTCMKTS:BKCT) and Primo Water (NASDAQ:PRMW) are both small-cap retail/wholesale companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, profitability, earnings, dividends, risk and institutional ownership.

Risk & Volatility

DTS8 Coffee has a beta of -0.96, indicating that its share price is 196% less volatile than the S&P 500. Comparatively, Primo Water has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500.

Insider and Institutional Ownership

75.8% of Primo Water shares are owned by institutional investors. 26.6% of DTS8 Coffee shares are owned by insiders. Comparatively, 13.5% of Primo Water shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares DTS8 Coffee and Primo Water’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DTS8 Coffee N/A N/A N/A
Primo Water -17.88% 10.31% 2.66%

Analyst Ratings

This is a summary of current recommendations and price targets for DTS8 Coffee and Primo Water, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DTS8 Coffee 0 0 0 0 N/A
Primo Water 0 0 5 0 3.00

Primo Water has a consensus target price of $18.50, suggesting a potential upside of 32.14%. Given Primo Water’s higher possible upside, analysts clearly believe Primo Water is more favorable than DTS8 Coffee.

Valuation and Earnings

This table compares DTS8 Coffee and Primo Water’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
DTS8 Coffee $310,000.00 1.60 N/A N/A N/A
Primo Water $286.07 million 1.89 -$6.35 million ($0.28) -50.00

DTS8 Coffee has higher earnings, but lower revenue than Primo Water.

Summary

Primo Water beats DTS8 Coffee on 8 of the 10 factors compared between the two stocks.

DTS8 Coffee Company Profile

DTS8 Coffee Company, Ltd., through its subsidiaries, engages in the roasting, marketing, and sale of gourmet roasted coffee in Shanghai and other parts of China. It markets and sells its coffee under the DTS8 Coffee, Don Manuel, and private label brands through distribution channels that serve consumers at restaurants, multi-location coffee shops, and offices. The company was formerly known as Berkeley Coffee & Tea, Inc. and changed its name to DTS8 Coffee Company, Ltd. in January 2013. DTS8 Coffee Company, Ltd. was founded in 2009 and is based in Jiangqiao, China.

Primo Water Company Profile

Primo Water Corporation, together with its subsidiaries, provides multi-gallon purified bottled water, self-service refill water, and water dispensers in the United States and Canada. It operates in three segments: Refill, Exchange, and Dispensers. The Refill segment sells filtered drinking water dispensed directly to consumers through self-service machines. The Exchange segment sells multi-gallon purified bottled water through point of purchase display racks and recycling centers. The Dispensers segment sells water dispensers that are designed to dispense Primo and other dispenser-compatible bottled water. As of March 6, 2018, the company offers its products and services at approximately 45,000 retail locations, as well as online. Primo Water Corporation was founded in 2004 and is headquartered in Winston-Salem, North Carolina.

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