General Mills (NYSE:GIS) vs. Nomad Foods (NYSE:NOMD) Financial Review

General Mills (NYSE:GIS) and Nomad Foods (NYSE:NOMD) are both consumer staples companies, but which is the better business? We will compare the two companies based on the strength of their earnings, analyst recommendations, profitability, risk, valuation, institutional ownership and dividends.

Profitability

This table compares General Mills and Nomad Foods’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
General Mills	12.05%	19.19%	5.48%
Nomad Foods	4.50%	9.83%	3.95%

Dividends

General Mills pays an annual dividend of $2.44 per share and has a dividend yield of 7.1%. Nomad Foods pays an annual dividend of $0.68 per share and has a dividend yield of 7.3%. General Mills pays out 59.7% of its earnings in the form of a dividend. Nomad Foods pays out 66.7% 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. General Mills has increased its dividend for 5 consecutive years and Nomad Foods has increased its dividend for 2 consecutive years.

Analyst Recommendations

This is a summary of current recommendations and price targets for General Mills and Nomad Foods, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
General Mills	6	11	4	0	1.90
Nomad Foods	2	1	3	0	2.17

General Mills currently has a consensus price target of $43.22, indicating a potential upside of 25.03%. Nomad Foods has a consensus price target of $12.50, indicating a potential upside of 34.48%. Given Nomad Foods’ stronger consensus rating and higher probable upside, analysts clearly believe Nomad Foods is more favorable than General Mills.

Valuation and Earnings

This table compares General Mills and Nomad Foods”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
General Mills	$19.49 billion	0.95	$2.30 billion	$4.09	8.45
Nomad Foods	$3.43 billion	0.39	$154.66 million	$1.02	9.11

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

Volatility and Risk

General Mills has a beta of -0.02, suggesting that its stock price is 102% less volatile than the S&P 500. Comparatively, Nomad Foods has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500.

Insider and Institutional Ownership

75.7% of General Mills shares are held by institutional investors. Comparatively, 75.3% of Nomad Foods shares are held by institutional investors. 0.3% of General Mills shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

General Mills beats Nomad Foods on 12 of the 17 factors compared between the two stocks.

About General Mills

General Mills, Inc. manufactures and markets branded consumer foods worldwide. The company operates through four segments: North America Retail; International; Pet; and North America Foodservice. It offers grain, ready-to-eat cereals, refrigerated yogurt, soup, meal kits, refrigerated and frozen dough products, dessert and baking mixes, bakery flour, frozen pizza and pizza snacks, snack bars, fruit and savory snacks, ice cream and frozen desserts, unbaked and fully baked frozen dough products, frozen hot snacks, ethnic meals, side dish mixes, frozen breakfast and entrees, nutrition bars, and frozen and shelf-stable vegetables. The company also manufactures and markets pet food products, including dog and cat food; and operates ice cream parlors. It markets its products under the Annie’s, Betty Crocker, Bisquick, Blue Buffalo, Bugles, Cascadian Farm, Cheerios, Chex, Cinnamon Toast Crunch, Cocoa Puffs, Cookie Crisp, Dunkaroos, Edgard & Cooper, Fiber One, Fruit by the Foot, Fruit Gushers, Fruit Roll-Ups, Gardetto’s, Gold Medal, Golden Grahams, Häagen-Dazs, Kitano, Kix, Lärabar, Latina, Lucky Charms, Muir Glen, Nature Valley, Nudges, Oatmeal Crisp, Old El Paso, Pillsbury, Progresso, Tastefuls, Total, Totino’s , Trix, True Chews, True Solutions, Wanchai Ferry, Wheaties, Wilderness, and Yoki brands. The company sells its products to grocery stores, mass merchandisers, membership stores, natural food chains, drug, dollar and discount chains, e-commerce retailers, commercial and noncommercial foodservice distributors and operators, restaurants, convenience stores, and pet specialty stores. General Mills, Inc. was founded in 1866 and is headquartered in Minneapolis, Minnesota.

About Nomad Foods

Nomad Foods Limited, together with its subsidiaries, manufactures, markets, and distributes a range of frozen food products in the United Kingdom and internationally. The company offers frozen fish products, including fish fingers, coated fish, and natural fish; ready-to-cook vegetable products, such as peas and spinach; and frozen poultry and meat products comprising nuggets, grills, and burgers. It also provides meal products that include ready-to-cook noodles, pasta, lasagna, pancakes, and other ready-made meals; ice creams, such as in-home and out-of-home ice creams; and other products consisting of soups, pizzas, bakery goods, and meat substitutes. The company sells its products to supermarkets and food retail chains primarily under the Birds Eye, Green Cuisine, iglo, Findus, Aunt Bessie's, Goodfella's, Frikom, Ledo, La Cocinera, and Belviva brand names. Nomad Foods Limited was founded in 2014 and is headquartered in Feltham, the United Kingdom.