Analyzing Colgate-Palmolive (NYSE:CL) and Ahold (OTCMKTS:ADRNY)

Ahold (OTCMKTS:ADRNY) and Colgate-Palmolive (NYSE:CL) are both large-cap consumer staples companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, profitability, risk, analyst recommendations, dividends, institutional ownership and valuation.

Risk and Volatility

Ahold has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500. Comparatively, Colgate-Palmolive has a beta of 0.3, indicating that its stock price is 70% less volatile than the S&P 500.

Institutional & Insider Ownership

0.2% of Ahold shares are owned by institutional investors. Comparatively, 80.4% of Colgate-Palmolive shares are owned by institutional investors. 0.4% of Colgate-Palmolive shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Ahold and Colgate-Palmolive’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ahold	2.25%	16.23%	4.74%
Colgate-Palmolive	14.47%	333.39%	17.57%

Earnings & Valuation

This table compares Ahold and Colgate-Palmolive”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ahold	$96.70 billion	0.38	$1.91 billion	€2.51	16.05
Colgate-Palmolive	$20.10 billion	3.08	$2.89 billion	$3.57	21.55

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

Dividends

Ahold pays an annual dividend of €0.93 per share and has a dividend yield of 2.3%. Colgate-Palmolive pays an annual dividend of $2.08 per share and has a dividend yield of 2.7%. Ahold pays out 37.1% of its earnings in the form of a dividend. Colgate-Palmolive pays out 58.3% 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. Colgate-Palmolive has raised its dividend for 63 consecutive years. Colgate-Palmolive is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Ahold and Colgate-Palmolive, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ahold	1	1	0	3	3.00
Colgate-Palmolive	1	5	10	0	2.56

Colgate-Palmolive has a consensus target price of $88.81, suggesting a potential upside of 15.46%. Given Colgate-Palmolive’s higher possible upside, analysts plainly believe Colgate-Palmolive is more favorable than Ahold.

Summary

Colgate-Palmolive beats Ahold on 13 of the 18 factors compared between the two stocks.

About Ahold

Koninklijke Ahold Delhaize N.V. operates retail food stores and e-commerce in the United States, Europe, and internationally. The company's stores offer produce, dairy, meat, deli, bakery, seafood, and frozen products; grocery, beer, and wine; floral, pet food, health and beauty care, kitchen and cookware, gardening tools, general merchandise articles, electronics, newspapers and magazines, tobacco, etc.; gasoline; and pharmacy products. It operates its supermarkets, convenience stores, and online stores under the Food Lion, Stop & Shop, The GIANT Company, Hannaford, Giant Food, FreshDirect, Albert Heijn, bol.com, Etos, Gall & Gall, Delhaize, Albert, Alfa Beta Vassilopoulos, Mega Image, Delhaize Serbia, Peapod Digital labs, and Retail Business Service brands. The company was formerly known as Koninklijke Ahold N.V. and changed its name to Koninklijke Ahold Delhaize N.V. in July 2016. Koninklijke Ahold Delhaize N.V. was founded in 1867 and is headquartered in Zaandam, the Netherlands.

About Colgate-Palmolive

Colgate-Palmolive Company, together with its subsidiaries, manufactures and sells consumer products in the United States and internationally. It operates through two segments: Oral, Personal and Home Care; and Pet Nutrition. The Oral, Personal and Home Care segment offers toothpaste, toothbrushes, mouthwash, bar and liquid hand soaps, shower gels, shampoos, conditioners, deodorants and antiperspirants, skin health products, dishwashing detergents, fabric conditioners, household cleaners, and other related items. This segment markets and sells its products under various brands, which include Colgate, Darlie, elmex, hello, meridol, Sorriso, Tom's of Maine, Irish Spring, Palmolive, Protex, Sanex, Softsoap, Lady Speed Stick, Speed Stick, EltaMD, Filorga, PCA SKIN, Ajax, Axion, Fabuloso, Murphy, Suavitel, and Soupline to a range of traditional and eCommerce retailers, wholesalers, and distributors. It includes pharmaceutical products for dentists and other oral health professionals. Its Pet Nutrition segment offers pet nutrition products for everyday nutritional needs under the Hill's Science Diet brand; and a range of therapeutic pet products to help nutritionally support dogs and cats in different stages of health under the Hill's Prescription Diet brand. This segment markets and sells its products through pet supply retailers, veterinarians, and eCommerce retailers. Colgate-Palmolive Company was founded in 1806 and is headquartered in New York, New York.