Reeds (OTCMKTS:REED) & CocaCola (NYSE:KO) Critical Contrast

CocaCola (NYSE:KO) and Reeds (OTCMKTS:REED) are both consumer staples companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, valuation, dividends and profitability.

Analyst Ratings

This is a summary of current ratings for CocaCola and Reeds, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CocaCola	0	0	16	1	3.06
Reeds	0	0	1	0	3.00

CocaCola currently has a consensus price target of $78.43, indicating a potential upside of 8.06%. Reeds has a consensus price target of $1.75, indicating a potential downside of 12.50%. Given CocaCola’s stronger consensus rating and higher probable upside, equities research analysts clearly believe CocaCola is more favorable than Reeds.

Volatility & Risk

CocaCola has a beta of 0.43, indicating that its share price is 57% less volatile than the S&P 500. Comparatively, Reeds has a beta of 0.18, indicating that its share price is 82% less volatile than the S&P 500.

Profitability

This table compares CocaCola and Reeds’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CocaCola	27.34%	43.62%	12.43%
Reeds	-43.28%	N/A	-69.61%

Valuation and Earnings

This table compares CocaCola and Reeds”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CocaCola	$47.66 billion	6.55	$10.63 billion	$3.02	24.03
Reeds	$50.78 million	2.11	-$13.15 million	($1.22)	-1.64

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

Institutional and Insider Ownership

70.3% of CocaCola shares are owned by institutional investors. Comparatively, 51.5% of Reeds shares are owned by institutional investors. 0.9% of CocaCola shares are owned by insiders. Comparatively, 0.3% of Reeds shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

CocaCola beats Reeds on 15 of the 15 factors compared between the two stocks.

About CocaCola

The Coca-Cola Company, a beverage company, manufactures, markets, and sells various nonalcoholic beverages worldwide. The company provides sparkling soft drinks, sparkling flavors; water, sports, coffee, and tea; juice, value-added dairy, and plant-based beverages; and other beverages. It also offers beverage concentrates and syrups, as well as fountain syrups to fountain retailers, such as restaurants and convenience stores. The company sells its products under the Coca-Cola, Diet Coke/Coca-Cola Light, Coca-Cola Zero Sugar, caffeine free Diet Coke, Cherry Coke, Fanta Orange, Fanta Zero Orange, Fanta Zero Sugar, Fanta Apple, Sprite, Sprite Zero Sugar, Simply Orange, Simply Apple, Simply Grapefruit, Fresca, Schweppes, Thums Up, Aquarius, Ayataka, BODYARMOR, Ciel, Costa, Dasani, dogadan, FUZE TEA, Georgia, glacéau smartwater, glacéau vitaminwater, Gold Peak, Ice Dew, I LOHAS, Powerade, Topo Chico, AdeS, Del Valle, fairlife, innocent, Minute Maid, and Minute Maid Pulpy brands. It operates through a network of independent bottling partners, distributors, wholesalers, and retailers, as well as through bottling and distribution operators. The company was founded in 1886 and is headquartered in Atlanta, Georgia.

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.