Newell Brands (NASDAQ:NWL) versus Ahold (OTCMKTS:ADRNY) Critical Review

Ahold (OTCMKTS:ADRNY) and Newell Brands (NASDAQ:NWL) are both consumer staples companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, risk, earnings, valuation, institutional ownership and dividends.

Institutional & Insider Ownership

0.2% of Ahold shares are held by institutional investors. Comparatively, 92.5% of Newell Brands shares are held by institutional investors. 0.7% of Newell Brands shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Ahold has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500. Comparatively, Newell Brands has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500.

Dividends

Ahold pays an annual dividend of €0.93 per share and has a dividend yield of 2.3%. Newell Brands pays an annual dividend of $0.28 per share and has a dividend yield of 6.4%. Ahold pays out 37.1% of its earnings in the form of a dividend. Newell Brands pays out -466.7% 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. Newell Brands is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Ahold and Newell Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ahold	2.25%	16.23%	4.74%
Newell Brands	-0.33%	8.64%	2.08%

Analyst Recommendations

This is a summary of current recommendations and price targets for Ahold and Newell Brands, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ahold	1	1	0	3	3.00
Newell Brands	1	5	4	0	2.30

Newell Brands has a consensus price target of $5.94, indicating a potential upside of 35.10%. Given Newell Brands’ higher possible upside, analysts clearly believe Newell Brands is more favorable than Ahold.

Valuation & Earnings

This table compares Ahold and Newell Brands”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ahold	$96.70 billion	0.37	$1.91 billion	€2.51	15.93
Newell Brands	$7.58 billion	0.24	-$216.00 million	($0.06)	-73.33

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

Summary

Ahold beats Newell Brands on 10 of the 17 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 Newell Brands

Newell Brands Inc. engages in the design, manufacture, sourcing, and distribution of consumer and commercial products worldwide. The company operates in three segments: Home and Commercial Solutions, Learning and Development, and Outdoor and Recreation. The Commercial Solutions segment provides commercial cleaning and maintenance solution products under the Rubbermaid, Rubbermaid Commercial Products, Mapa, and Spontex brands; closet and garage organization products; hygiene systems and material handling solutions; household products, such as kitchen appliances under the Crockpot, Mr. Coffee, Oster, and Sunbeam brands; small appliances under the Breville brand name in Europe; food and home storage products under the FoodSaver, Rubbermaid, Ball, and Sistema brands; fresh preserving products; vacuum sealing products; and gourmet cookware, bakeware, and cutlery under the Calphalon brand; and home fragrance products under the WoodWick and Yankee Candle brands. The Learning and Development segment offers writing instruments, including markers and highlighters, pens, and pencils; art products; activity-based products; labeling solutions; and baby gear and infant care products under the Dymo, Elmer's, EXPO, Graco, NUK, Paper Mate, Parker, and Sharpie brands. The Outdoor and Recreation segment provides outdoor and outdoor-related products, inlcuding technical apparel and on-the-go beverageware under the Campingaz, Coleman, Contigo, and Marmot brands. It serves warehouse clubs, department and drug/grocery stores, mass merchants, home centers, commercial products distributors, specialty retailers, office superstores and supply stores, contract stationers, e-commerce retailers, and sporting goods, as well as direct to consumers online, select contract customers, and other professional customers. Newell Brands Inc. was founded in 1903 and is based in Atlanta, Georgia.