Head to Head Survey: The Hershey (HSY) & Cosan (CZZ)

The Hershey (NYSE: HSY) and Cosan (NYSE:CZZ) are both consumer staples companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, institutional ownership, valuation, dividends, analyst recommendations, earnings and profitability.

Dividends

The Hershey pays an annual dividend of $2.62 per share and has a dividend yield of 2.8%. Cosan pays an annual dividend of $0.08 per share and has a dividend yield of 0.8%. The Hershey pays out 55.0% of its earnings in the form of a dividend. Cosan pays out 12.5% 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. The Hershey has increased its dividend for 8 consecutive years. The Hershey is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

54.0% of The Hershey shares are held by institutional investors. Comparatively, 25.7% of Cosan shares are held by institutional investors. 0.9% of The Hershey shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for The Hershey and Cosan, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Hershey 4 10 2 0 1.88
Cosan 0 3 1 0 2.25

The Hershey currently has a consensus target price of $103.31, indicating a potential upside of 11.20%. Cosan has a consensus target price of $13.00, indicating a potential upside of 34.85%. Given Cosan’s stronger consensus rating and higher possible upside, analysts clearly believe Cosan is more favorable than The Hershey.

Profitability

This table compares The Hershey and Cosan’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Hershey 13.25% 113.86% 17.28%
Cosan 4.41% 5.22% 1.60%

Valuation & Earnings

This table compares The Hershey and Cosan’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
The Hershey $7.52 billion 2.59 $782.98 million $4.76 19.52
Cosan $4.26 billion 0.55 $172.57 million $0.64 15.06

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

Volatility and Risk

The Hershey has a beta of 0.34, meaning that its stock price is 66% less volatile than the S&P 500. Comparatively, Cosan has a beta of 2.35, meaning that its stock price is 135% more volatile than the S&P 500.

Summary

The Hershey beats Cosan on 13 of the 17 factors compared between the two stocks.

The Hershey Company Profile

The Hershey Company, together with its subsidiaries, manufactures and sells confectionery products. The company operates through two segments, North America; and International and Other. It offers chocolate and non-chocolate confectionery products; gum and mint refreshment products comprising mints, chewing gums, and bubble gums; pantry items, such as baking ingredients, toppings, beverages, and sundae syrups; and snack items, including spreads, meat snacks, bars and snack bites, mixes, popcorn and protein bars, and cookies. The company provides its products primarily under the Hershey's, Reese's, Kisses, Jolly Rancher, Almond Joy, Brookside, barkTHINS, Cadbury, Good & Plenty, Heath, Kit Kat, Lancaster, Payday, Rolo, Twizzlers, Whoppers, York, Scharffen Berger, Dagoba, Ice Breakers, Breathsavers, and Bubble Yum brands, as well as under the Golden Monkey, Munching Monkey, Pelon Pelo Rico, IO-IO, Nutrine, Maha Lacto, Jumpin, Sofit, SkinnyPop, Oatmega, Paqui, and Tyrrells brands. It markets and sells its products to wholesale distributors, chain grocery stores, mass merchandisers, chain drug stores, vending companies, wholesale clubs, convenience stores, dollar stores, concessionaires, and department stores. The Hershey Company was founded in 1894 and is headquartered in Hershey, Pennsylvania.

Cosan Company Profile

Cosan Limited, together with its subsidiaries, engages in fuel and natural gas distribution, logistics, lubricant, sugar and ethanol, and fuel businesses primarily in Brazil and internationally. The company's Raízen Energia segment produces and markets various products derived from sugar cane, including raw sugar, and anhydrous and hydrated ethanol. This segment is also involved in activities related to energy cogeneration from sugarcane bagasse; and holds interests in companies involved in research and development on new technology. Its Raízen Combustíveis segment distributes and markets fuels, primarily through a franchised network of service stations under the Shell brand in Brazil. The company's COMGÁS segment distributes piped natural gas to customers in the industrial, residential, commercial, automotive, thermogeneration, and cogeneration sectors in part of the State of Sao Paulo. Its Cosan Logística segment provides logistics services for transport, storage, and port loading of commodities, primarily for sugar products; and leasing or lending of locomotives, wagons, and other railway equipment. The company's Lubricants segment produces and distributes lubricants under the Mobil brand and Comma name. Cosan Limited operates a network of approximately 6,000 Shell service stations and 960 convenience stores, as well as 67 distribution terminals and 64 airport terminals. The company was incorporated in 2007 and is based in São Paulo, Brazil.

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