Financial Review: Reed’s (NYSE:REED) vs. Celsius (NASDAQ:CELH)

Reed’s (NYSE:REED – Get Rating) and Celsius (NASDAQ:CELH – Get Rating) are both consumer staples companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, analyst recommendations, valuation and dividends.

Institutional and Insider Ownership

35.8% of Reed’s shares are held by institutional investors. Comparatively, 67.5% of Celsius shares are held by institutional investors. 29.9% of Reed’s shares are held by company insiders. Comparatively, 2.7% of Celsius shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for Reed’s and Celsius, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Reed’s	0	0	0	0	N/A
Celsius	0	0	7	0	3.00

Celsius has a consensus price target of $131.78, indicating a potential upside of 1.67%. Given Celsius’ higher possible upside, analysts clearly believe Celsius is more favorable than Reed’s.

Profitability

This table compares Reed’s and Celsius’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Reed’s	-36.23%	-1,582.74%	-62.85%
Celsius	-19.58%	9.01%	0.90%

Risk & Volatility

Reed’s has a beta of 1.62, meaning that its stock price is 62% more volatile than the S&P 500. Comparatively, Celsius has a beta of 1.8, meaning that its stock price is 80% more volatile than the S&P 500.

Valuation and Earnings

This table compares Reed’s and Celsius’ gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Reed’s	$53.04 million	0.14	-$20.06 million	($8.99)	-0.31
Celsius	$653.60 million	15.23	-$187.28 million	($2.31)	-56.11

Reed’s has higher earnings, but lower revenue than Celsius. Celsius is trading at a lower price-to-earnings ratio than Reed’s, indicating that it is currently the more affordable of the two stocks.

Summary

Celsius beats Reed’s on 10 of the 13 factors compared between the two stocks.

About Reed’s

(Get Rating)

Reed’s, Inc. engages in the manufacture and distribution of carbonated and non-carbonated beverages. Its product lines include Reed’s Ginger Brews, Virgil’s Root Beer, and Flying Caldron Butterscotch Beer. The company was founded by Christopher J. Reed in June 1987 and is headquartered in Norwalk, CT.

About Celsius

(Get Rating)

Celsius Holdings, Inc. engages in the development, marketing, sale, and distribution of functional drinks and liquid supplements. It also offers post-workout functional energy drinks and protein bars. The company was founded in April 2004 and is headquartered in Boca Raton, FL.