Reeds (OTCMKTS:REED – Get Free Report) and Westrock Coffee (NASDAQ:WEST – Get Free Report) are both small-cap consumer staples companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, dividends, institutional ownership, risk and profitability.
Profitability
This table compares Reeds and Westrock Coffee’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% |
| Westrock Coffee | -9.61% | -41.92% | -3.46% |
Insider & Institutional Ownership
51.5% of Reeds shares are owned by institutional investors. Comparatively, 45.1% of Westrock Coffee shares are owned by institutional investors. 88.0% of Reeds shares are owned by insiders. Comparatively, 42.1% of Westrock Coffee shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Reeds | 0 | 0 | 1 | 0 | 3.00 |
| Westrock Coffee | 0 | 0 | 5 | 0 | 3.00 |
Reeds presently has a consensus target price of $1.75, indicating a potential upside of 81.38%. Westrock Coffee has a consensus target price of $10.40, indicating a potential upside of 74.50%. Given Reeds’ higher possible upside, research analysts clearly believe Reeds is more favorable than Westrock Coffee.
Earnings and Valuation
This table compares Reeds and Westrock Coffee”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Reeds | $50.78 million | 0.86 | -$13.15 million | ($1.86) | -0.52 |
| Westrock Coffee | $850.73 million | 0.66 | -$80.30 million | ($0.91) | -6.55 |
Reeds has higher earnings, but lower revenue than Westrock Coffee. Westrock Coffee is trading at a lower price-to-earnings ratio than Reeds, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Reeds has a beta of 0.25, indicating that its stock price is 75% less volatile than the S&P 500. Comparatively, Westrock Coffee has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500.
Summary
Reeds beats Westrock Coffee on 7 of the 13 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 Westrock Coffee
Westrock Coffee Company, LLC operates as an integrated coffee, tea, flavors, extracts, and ingredients solutions provider in the United States and internationally. It operates through two segments, Beverage Solutions, and Sustainable Sourcing & Traceability (SS&T). The Beverage Solutions segment provides various packaging, including branded and private label coffee in bags, fractional packs, and single serve cups, as well as extract solutions for applications in cold brew and ready-to-drink offerings. The SS&T segment engages in delivery and settlement of forward sales contracts for green coffee. The company offers coffee sourcing, supply chain management, product development, roasting, packaging, and distribution services to the retail, food service and restaurant, convenience store and travel center, non-commercial account, CPG, and hospitality industries. Westrock Coffee Company, LLC was founded in 2009 and is headquartered in Little Rock, Arkansas.
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