Critical Review: Primo Brands (NYSE:PRMB) versus Celsius (NASDAQ:CELH)

Celsius (NASDAQ:CELH) and Primo Brands (NYSE:PRMB) are both consumer staples companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, analyst recommendations, risk, earnings and profitability.

Analyst Recommendations

This is a summary of recent ratings and price targets for Celsius and Primo Brands, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Celsius	1	4	13	0	2.67
Primo Brands	0	0	3	0	3.00

Celsius presently has a consensus price target of $50.28, indicating a potential upside of 73.31%. Primo Brands has a consensus price target of $37.00, indicating a potential upside of 20.01%. Given Celsius’ higher probable upside, equities research analysts plainly believe Celsius is more favorable than Primo Brands.

Insider & Institutional Ownership

61.0% of Celsius shares are held by institutional investors. Comparatively, 87.7% of Primo Brands shares are held by institutional investors. 2.2% of Celsius shares are held by insiders. Comparatively, 2.5% of Primo Brands shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

Celsius has a beta of 1.79, suggesting that its share price is 79% more volatile than the S&P 500. Comparatively, Primo Brands has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500.

Earnings & Valuation

This table compares Celsius and Primo Brands”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Celsius	$1.37 billion	4.97	$226.80 million	$0.72	40.29
Primo Brands	$4.84 billion	2.42	$238.10 million	$1.61	19.15

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

Profitability

This table compares Celsius and Primo Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Celsius	15.61%	59.40%	12.96%
Primo Brands	13.63%	8.80%	3.62%

Summary

Celsius beats Primo Brands on 8 of the 14 factors compared between the two stocks.

About Celsius

Celsius Holdings, Inc. develops, processes, markets, distributes, and sells functional energy drinks and liquid supplements in the United States, Australia, New Zealand, Canadian, European, Middle Eastern, Asia-Pacific, and internationally. The company offers CELSIUS, a fitness drink or supplement designed to accelerate metabolism and burn body fat; various flavors and carbonated and non-carbonated functional energy drinks under the CELSIUS Originals and Vibe name, as well as functional energy drink under the CELSIUS Essentials and CELSIUS On-the-Go Powder names; and CELSIUS ready-to drink products. It distributes its products through direct-to-store delivery, distributors, supermarkets, convenience stores, drug stores, nutritional stores, and mass merchants, as well as health clubs, gyms, the military, and e-commerce websites. The company was formerly known as Vector Ventures, Inc. and changed its name to Celsius Holdings, Inc. in January 2007. Celsius Holdings, Inc. was founded in 2004 and is headquartered in Boca Raton, Florida.

About Primo Brands

Primo Water Corporation is a leading pure-play water solutions provider in North America and Europe. Primo operates largely under a recurring razor/razorblade revenue model. The razor in Primo’s revenue model is its industry leading line-up of sleek and innovative water dispensers, which are sold through major retailers and online at various price points or leased to customers. The dispensers help increase household penetration, which drives recurring purchases of Primo’s razorblade offering. Primo’s razorblade offering is comprised of Water Direct, Water Exchange, and Water Refill. Primo’s water solutions expand consumer access to purified, spring and mineral water to promote a healthier, more sustainable lifestyle while simultaneously reducing plastic waste and pollution. Primo is committed to its water stewardship standards and is proud to partner with the International Bottled Water Association in North America as well as with Watercoolers Europe.