JBS (OTCMKTS:JBSAY) vs. Nomad Foods (NYSE:NOMD) Critical Review

Nomad Foods (NYSE:NOMD) and JBS (OTCMKTS:JBSAY) are both consumer staples companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Profitability

This table compares Nomad Foods and JBS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nomad Foods	4.20%	8.88%	3.53%
JBS	2.43%	24.07%	5.01%

Risk and Volatility

Nomad Foods has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500. Comparatively, JBS has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500.

Institutional & Insider Ownership

75.3% of Nomad Foods shares are held by institutional investors. Comparatively, 0.1% of JBS shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and target prices for Nomad Foods and JBS, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nomad Foods	1	2	3	0	2.33
JBS	0	0	3	0	3.00

Nomad Foods presently has a consensus price target of $13.25, suggesting a potential upside of 13.73%. JBS has a consensus price target of $18.33, suggesting a potential upside of 26.96%. Given JBS’s stronger consensus rating and higher possible upside, analysts clearly believe JBS is more favorable than Nomad Foods.

Earnings & Valuation

This table compares Nomad Foods and JBS”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nomad Foods	$3.43 billion	0.47	$154.66 million	$1.02	11.42
JBS	$77.18 billion	0.21	$1.77 billion	$1.84	7.85

JBS has higher revenue and earnings than Nomad Foods. JBS is trading at a lower price-to-earnings ratio than Nomad Foods, indicating that it is currently the more affordable of the two stocks.

Dividends

Nomad Foods pays an annual dividend of $0.68 per share and has a dividend yield of 5.8%. JBS pays an annual dividend of $1.05 per share and has a dividend yield of 7.3%. Nomad Foods pays out 66.7% of its earnings in the form of a dividend. JBS pays out 57.1% 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. Nomad Foods has raised its dividend for 2 consecutive years. JBS is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

JBS beats Nomad Foods on 10 of the 15 factors compared between the two stocks.

About Nomad Foods

Nomad Foods Limited, together with its subsidiaries, manufactures, markets, and distributes a range of frozen food products in the United Kingdom and internationally. The company offers frozen fish products, including fish fingers, coated fish, and natural fish; ready-to-cook vegetable products, such as peas and spinach; and frozen poultry and meat products comprising nuggets, grills, and burgers. It also provides meal products that include ready-to-cook noodles, pasta, lasagna, pancakes, and other ready-made meals; ice creams, such as in-home and out-of-home ice creams; and other products consisting of soups, pizzas, bakery goods, and meat substitutes. The company sells its products to supermarkets and food retail chains primarily under the Birds Eye, Green Cuisine, iglo, Findus, Aunt Bessie's, Goodfella's, Frikom, Ledo, La Cocinera, and Belviva brand names. Nomad Foods Limited was founded in 2014 and is headquartered in Feltham, the United Kingdom.

About JBS

JBS S.A., together with its subsidiaries, engages in the processing of animal protein worldwide. The company trades in beef, pork, chicken, poultry, fish, and lamb products; cooked frozen meat; plant based products; and other food products. It produces and commercializes leather, steel cans, plastic resin, personal care and cleaning products, and collagen, as well as wet blue leather, semi-finished, and finished leather products. In addition, it is involved in transportation, cold storage, industrial waste management solutions, recycling, and produces and commercializes electric power. Further, the company engages in the production and commercialization of raw ham and cooked ham; purchases and sells soybeans, tallow, palm oil, and caustic soda; and operates distribution centers and harbors. Additionally, it produces beef jerky; offers cattle fattening and warehousing services; operates logistics; and trades in by products from processing. The company was formerly known as Friboi Ltda. JBS S.A. was founded in 1953 and is headquartered in São Paulo, Brazil.