Comparing Molson Coors Beverage (NYSE:TAP) & Diageo (NYSE:DEO)

Diageo (NYSE:DEO) and Molson Coors Beverage (NYSE:TAP) are both consumer staples companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, earnings, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Diageo and Molson Coors Beverage, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Diageo	2	3	4	0	2.22
Molson Coors Beverage	2	9	6	0	2.24

Diageo currently has a consensus target price of $119.00, indicating a potential upside of 31.19%. Molson Coors Beverage has a consensus target price of $54.56, indicating a potential upside of 17.92%. Given Diageo’s higher possible upside, research analysts plainly believe Diageo is more favorable than Molson Coors Beverage.

Dividends

Diageo pays an annual dividend of $4.95 per share and has a dividend yield of 5.5%. Molson Coors Beverage pays an annual dividend of $1.88 per share and has a dividend yield of 4.1%. Molson Coors Beverage pays out -17.6% of its earnings in the form of a dividend. Molson Coors Beverage has raised its dividend for 4 consecutive years.

Profitability

This table compares Diageo and Molson Coors Beverage’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Diageo	N/A	N/A	N/A
Molson Coors Beverage	7.81%	8.61%	4.39%

Insider and Institutional Ownership

9.0% of Diageo shares are held by institutional investors. Comparatively, 78.5% of Molson Coors Beverage shares are held by institutional investors. 2.7% of Molson Coors Beverage shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Diageo has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500. Comparatively, Molson Coors Beverage has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500.

Valuation & Earnings

This table compares Diageo and Molson Coors Beverage”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diageo	$20.25 billion	2.49	$2.35 billion	N/A	N/A
Molson Coors Beverage	$11.21 billion	0.82	$1.12 billion	($10.68)	-4.33

Diageo has higher revenue and earnings than Molson Coors Beverage.

Summary

Molson Coors Beverage beats Diageo on 10 of the 15 factors compared between the two stocks.

About Diageo

Diageo plc, together with its subsidiaries, engages in the production, marketing, and sale of alcoholic beverages. The company offers scotch, gin, vodka, rum, raki, liqueur, wine, tequila, Chinese white spirits, cachaça, and brandy, as well as beer, including cider and flavored malt beverages. It also provides Chinese, Canadian, Irish, American, and Indian-Made Foreign Liquor whiskies, as well as flavored malt beverages, ready to drink, and non-alcoholic products. The company provides its products under the Johnnie Walker, Crown Royal, J&B, Buchanan’s, Smirnoff, Cîroc, Ketel One, Captain Morgan, Baileys, Don Julio, Casamigos, Tanqueray, Guinness, Shui Jing Fang, Yenì, McDowell’s, Don Papa, Aviation American, Seagram, Seagram’s 7 Crown, Zacapa, Black Dog, Black & White, Signature, Royal Challenge, Godawan, Antiquity, Gordon’s, Old Parr, Windsor, Bundaberg, Ypióca, Bulleit, and Bell’s brand names. It operates in the United States, the United Kingdom, Türkiye, Australia, Korea, India, Greater China, Brazil, Mexico, South Africa, Nigeria, and internationally. The company was incorporated in 1886 and is headquartered in London, the United Kingdom.

About Molson Coors Beverage

Molson Coors Beverage Company manufactures, markets, and sells beer and other malt beverage products under various brands in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company offers flavored malt beverages including hard seltzers, craft, spirits and energy, and ready to drink beverages. It provides its products under Aspall Cider, Blue Moon, Coors Original, Five Trail, Hop Valley brands, Leinenkugel’s, Madri, Miller Genuine Draft, Molson Ultra, Sharp’s, Staropramen, and Vizzy Hard Seltzer above premier brands; Bergenbier, Borsodi, Carling, Coors Banquet, Coors Light, Jelen, Kamenitza, Miller Lite, Molson Canadian, and Niksicko, Ozujsko under the premium brands; and Branik, Icehouse, Keystone, Miller High Life, Milwaukee’s Best, and Steel Reserve under the economy brands. The company was formerly known as Molson Coors Brewing Company and changed its name to Molson Coors Beverage Company in January 2020. Molson Coors Beverage Company was founded in 1774 and is based in Golden, Colorado.