Avon Products (NYSE: AVP) and Estee Lauder Companies, Inc. (The) (NYSE:EL) are both consumer staples companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.

Institutional & Insider Ownership

84.2% of Avon Products shares are held by institutional investors. Comparatively, 54.6% of Estee Lauder Companies, Inc. (The) shares are held by institutional investors. 1.3% of Avon Products shares are held by insiders. Comparatively, 17.0% of Estee Lauder Companies, Inc. (The) shares are held by 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.

Dividends

Estee Lauder Companies, Inc. (The) pays an annual dividend of $1.36 per share and has a dividend yield of 1.2%. Avon Products does not pay a dividend. Estee Lauder Companies, Inc. (The) pays out 40.6% of its earnings in the form of a dividend. Avon Products has raised its dividend for 3 consecutive years.

Risk and Volatility

Avon Products has a beta of 1.88, indicating that its stock price is 88% more volatile than the S&P 500. Comparatively, Estee Lauder Companies, Inc. (The) has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500.

Valuation and Earnings

This table compares Avon Products and Estee Lauder Companies, Inc. (The)’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Avon Products $5.71 billion 0.19 $385.60 million ($0.19) -13.21
Estee Lauder Companies, Inc. (The) $11.82 billion 3.39 $2.35 billion $3.35 32.48

Estee Lauder Companies, Inc. (The) has higher revenue and earnings than Avon Products. Avon Products is trading at a lower price-to-earnings ratio than Estee Lauder Companies, Inc. (The), indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Avon Products and Estee Lauder Companies, Inc. (The)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Avon Products -0.99% -3.68% -0.23%
Estee Lauder Companies, Inc. (The) 10.56% 32.38% 11.90%

Analyst Ratings

This is a summary of recent recommendations for Avon Products and Estee Lauder Companies, Inc. (The), as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Avon Products 0 5 1 0 2.17
Estee Lauder Companies, Inc. (The) 0 4 15 0 2.79

Avon Products currently has a consensus price target of $4.58, suggesting a potential upside of 82.60%. Estee Lauder Companies, Inc. (The) has a consensus price target of $109.61, suggesting a potential upside of 0.74%. Given Avon Products’ higher probable upside, analysts clearly believe Avon Products is more favorable than Estee Lauder Companies, Inc. (The).

Summary

Estee Lauder Companies, Inc. (The) beats Avon Products on 11 of the 16 factors compared between the two stocks.

Avon Products Company Profile

Avon Products, Inc. is a manufacturer and marketer of beauty and related products. The Company’s segments include Europe, Middle East & Africa; South Latin America; North Latin America, and Asia Pacific. Its product categories are Beauty, and Fashion and Home. Beauty consists of skincare (which includes personal care), fragrance and color (cosmetics). Fashion and Home consists of fashion jewelry, watches, apparel, footwear, accessories, gift and decorative products, housewares, entertainment and leisure products, children’s products and nutritional products. The Company’s products include Anew Ultimate Supreme Advanced Performance Creme, Anew Vitale Visible Perfection Blurring Treatment, Big & Multiplied Volume Mascara, Avon True Perfectly Matte Lipstick, Avon Life for Him and for Her Fragrances, Far Away Infinity Fragrance and Avon Nutra Effects body collection with Active Seed Complex. The Company primarily sells its products to the consumer through the direct-selling channel.

Estee Lauder Companies, Inc. (The) Company Profile

The Estee Lauder Companies Inc. manufactures and markets skin care, makeup, fragrance and hair care products. The Company offers products, including skin care, makeup, fragrance, hair care and other. The Company operates in beauty products segment. The Company’s products are sold in over 150 countries and territories under brand names, including Estee Lauder, Aramis, Clinique, Prescriptives, Lab Series, Origins, Tommy Hilfiger, MAC, Kiton, La Mer, Bobbi Brown, Donna Karan New York, DKNY, Aveda, Jo Malone London, Bumble and bumble, Michael Kors, Darphin, Tom Ford, Smashbox, Ermenegildo Zegna, AERIN, Tory Burch, RODIN olio lusso, Le Labo, Editions de Parfums Frederic Malle, GLAMGLOW, By Kilian, BECCA and Too Faced. Its skin care products include moisturizers, serums, cleansers, toners, body care, exfoliators, acne and oil correctors, facial masks, cleansing devices and sun care products.

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