Critical Review: Elizabeth Arden (RDEN) vs. Coty (COTY)
Elizabeth Arden (NASDAQ: RDEN) and Coty (NYSE:COTY) are both non-cyclical consumer goods & services companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, risk, dividends, valuation, earnings, analyst recommendations and profitabiliy.
Coty pays an annual dividend of $0.50 per share and has a dividend yield of 2.5%. Elizabeth Arden does not pay a dividend. Coty pays out -200.0% of its earnings in the form of a dividend. Elizabeth Arden has raised its dividend for 2 consecutive years.
Valuation and Earnings
This table compares Elizabeth Arden and Coty’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Coty||$6.48 billion||2.30||$991.00 million||($0.25)||-79.60|
Coty has higher revenue and earnings than Elizabeth Arden. Coty is trading at a lower price-to-earnings ratio than Elizabeth Arden, indicating that it is currently the more affordable of the two stocks.
This table compares Elizabeth Arden and Coty’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
70.7% of Elizabeth Arden shares are held by institutional investors. Comparatively, 66.3% of Coty shares are held by institutional investors. 15.2% of Elizabeth Arden shares are held by company insiders. Comparatively, 16.1% of Coty shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Risk & Volatility
Elizabeth Arden has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500. Comparatively, Coty has a beta of 0.3, meaning that its share price is 70% less volatile than the S&P 500.
This is a summary of recent recommendations for Elizabeth Arden and Coty, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Elizabeth Arden presently has a consensus target price of $14.00, suggesting a potential upside of 0.07%. Coty has a consensus target price of $22.89, suggesting a potential upside of 15.04%. Given Coty’s stronger consensus rating and higher probable upside, analysts clearly believe Coty is more favorable than Elizabeth Arden.
Coty beats Elizabeth Arden on 11 of the 14 factors compared between the two stocks.
Elizabeth Arden Company Profile
Elizabeth Arden, Inc. is a global beauty products company with a portfolio of fragrance, skin care and cosmetics brands. The Company’s segments include North America and International. The Company’s North America segment sells its portfolio of owned, licensed and distributed brands, including the Elizabeth Arden products, to retailers, mass retailers and distributors in the United States, Canada and Puerto Rico, and also includes its direct to consumer business, which consists of its Elizabeth Arden branded retail outlet stores and its e-commerce business in North America. The Company’s North America segment also sells Elizabeth Arden products through the Red Door Spa beauty salons and spas. The Company’s International segment sells its portfolio of owned and licensed brands, including its Elizabeth Arden products, to perfumeries, boutiques, department stores, travel retail outlets and distributors in approximately 120 countries outside of North America.
Coty Company Profile
Coty Inc. is a beauty company. The Company operates through four segments: Fragrances, Color Cosmetics, Skin & Body Care and Brazil Acquisition. Its fragrance products include a range of men’s and women’s products. Its fragrance brands include Calvin Klein, Marc Jacobs, Davidoff, Chloe, Balenciaga, Beyonce, Bottega Veneta, Miu Miu and Roberto Cavalli. Its color cosmetics products include lip, eye, nail and facial color products. The brands in its Color Cosmetics segment include Bourjois, Rimmel, Sally Hansen and OPI. Its skin & body care products include shower gels, deodorants, skin care and sun treatment products. Its skin & body care brands are adidas, Lancaster, philosophy and Playboy. The Company, through Hypermarcas S.A., engages in personal care and beauty business. The Brazil Acquisition segment includes product groupings, such as skin care, nail care, deodorants and hair care products. It operates in the Americas; Europe, the Middle East and Africa (EMEA), and Asia Pacific.
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