Reviewing Jones Soda (OTCMKTS:JSDA) & Reeds (OTCMKTS:REED)

Reeds (OTCMKTS:REED) and Jones Soda (OTCMKTS:JSDA) are both small-cap consumer staples companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, risk, institutional ownership and dividends.

Volatility & Risk

Reeds has a beta of 0.26, meaning that its share price is 74% less volatile than the S&P 500. Comparatively, Jones Soda has a beta of 1.49, meaning that its share price is 49% more volatile than the S&P 500.

Insider and Institutional Ownership

51.5% of Reeds shares are owned by institutional investors. 88.0% of Reeds shares are owned by company insiders. Comparatively, 9.8% of Jones Soda shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Reeds and Jones Soda”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Reeds	$37.95 million	1.06	-$13.15 million	($1.86)	-0.48
Jones Soda	$19.16 million	0.97	-$9.90 million	($0.09)	-1.78

Jones Soda has lower revenue, but higher earnings than Reeds. Jones Soda is trading at a lower price-to-earnings ratio than Reeds, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Reeds and Jones Soda’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Reeds	-33.24%	N/A	-61.17%
Jones Soda	-51.13%	-209.02%	-77.37%

Analyst Ratings

This is a summary of recent ratings and price targets for Reeds and Jones Soda, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Reeds	0	0	1	0	3.00
Jones Soda	0	0	0	0	0.00

Reeds currently has a consensus target price of $1.75, indicating a potential upside of 97.27%. Given Reeds’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Reeds is more favorable than Jones Soda.

Summary

Reeds beats Jones Soda on 11 of the 14 factors compared between the two stocks.

About Reeds

Reed's, Inc. engages in the manufacture and distribution of natural beverages in the United States. The company offers Reed's craft ginger beer; Reed's real ginger ales; Reed's Classic Mules; Reed's Hard Ginger Ale; Reed's ready to drink products; and Virgil's handcrafted sodas. It sells its products to natural food and gourmet retailers, grocery store chains, mass merchants, club stores, convenience and drug stores, liquor stores, industrial cafeterias, and on-premise bars and restaurants, as well as directly to consumers through www.drinkreeds.com. The company was formerly known as Original Beverage Corporation and changed its name to Reed's, Inc. in 2001. Reed's, Inc. was founded in 1987 and is headquartered in Norwalk, Connecticut.

About Jones Soda

Jones Soda Co., together with its subsidiaries, engages in development, production, marketing, and distribution of beverages primarily in the United States, Canada, and internationally. The company provides craft sodas under the Jones Soda and Lemoncocco brands; and tetrahydrocannabinol infused cannabis products under the Mary Jones brand name. It also offers co-brand and private label products; fountain products, including cane sugar cola and sugar free cola, cane sugar sweetened ginger ale, orange and cream, root beer, and lemon lime; food products; and other products comprising teas, lemonade, vitamin enhanced waters, hydration beverages, and naturally flavored sparkling waters. The company sells and distributes its products through a network of independent distributors, and directly to national and regional retail accounts, as well as in grocery stores, convenience and gas stores, restaurants, delicatessens, sandwich shops, and burger restaurants; sells various products online, including soda with customized labels, wearables, candy, and other items; and licenses its trademarks for use on products sold by other manufacturers. Jones Soda Co. was founded in 1986 and is based in Seattle, Washington.