Critical Analysis: Krispy Kreme (NASDAQ:DNUT) versus Colgate-Palmolive (NYSE:CL)

Krispy Kreme (NASDAQ:DNUT) and Colgate-Palmolive (NYSE:CL) are both consumer staples companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, institutional ownership and risk.

Analyst Ratings

This is a summary of recent ratings and price targets for Krispy Kreme and Colgate-Palmolive, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Krispy Kreme	3	5	3	0	2.00
Colgate-Palmolive	0	6	11	0	2.65

Krispy Kreme currently has a consensus target price of $5.59, suggesting a potential upside of 91.29%. Colgate-Palmolive has a consensus target price of $94.38, suggesting a potential downside of 1.25%. Given Krispy Kreme’s higher possible upside, equities analysts clearly believe Krispy Kreme is more favorable than Colgate-Palmolive.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Krispy Kreme	-33.27%	-5.13%	-1.67%
Colgate-Palmolive	10.45%	353.72%	17.63%

Institutional & Insider Ownership

81.7% of Krispy Kreme shares are owned by institutional investors. Comparatively, 80.4% of Colgate-Palmolive shares are owned by institutional investors. 3.0% of Krispy Kreme shares are owned by company insiders. Comparatively, 0.4% of Colgate-Palmolive shares are owned by company 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.

Valuation & Earnings

This table compares Krispy Kreme and Colgate-Palmolive”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Krispy Kreme	$1.67 billion	0.30	$3.10 million	($2.99)	-0.98
Colgate-Palmolive	$20.38 billion	3.78	$2.13 billion	$2.62	36.48

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

Volatility & Risk

Krispy Kreme has a beta of 1.31, meaning that its share price is 31% more volatile than the S&P 500. Comparatively, Colgate-Palmolive has a beta of 0.29, meaning that its share price is 71% less volatile than the S&P 500.

Summary

Colgate-Palmolive beats Krispy Kreme on 10 of the 14 factors compared between the two stocks.

About Krispy Kreme

Krispy Kreme, Inc., together with its subsidiaries, produces doughnuts in the United States, the United Kingdom, Ireland, Australia, New Zealand, Mexico, Canada, Japan, and internationally. The company operates through three segments: U.S., International, and Market Development. The company offers doughnut experiences through hot light theater and fresh shops, delivered fresh daily branded cabinets and merchandising units within grocery and convenience stores, quick service restaurants, club memberships, drug stores, and ecommerce, as well as through its branded sweet treat line comprising Krispy Kreme branded sweet treats. It also provides cookies under the Insomnia Cookies brand, cookie cakes, ice cream, cookie-wiches, and brownies; and operates Krispy Kreme company-owned shops and franchise shops. The company was formerly known as Krispy Kreme Doughnuts, Inc. and changed its name to Krispy Kreme, Inc. in May 2021. Krispy Kreme, Inc. was founded in 1937 and is based in Charlotte, North Carolina.

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.