Revlon (NYSE: REV) and Colgate-Palmolive (NYSE:CL) are both consumer staples companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, profitability, earnings, dividends, institutional ownership, analyst recommendations and risk.

Insider and Institutional Ownership

14.0% of Revlon shares are owned by institutional investors. Comparatively, 73.0% of Colgate-Palmolive shares are owned by institutional investors. 78.0% of Revlon shares are owned by insiders. Comparatively, 1.0% of Colgate-Palmolive shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Colgate-Palmolive pays an annual dividend of $1.60 per share and has a dividend yield of 2.2%. Revlon does not pay a dividend. Colgate-Palmolive pays out 59.5% of its earnings in the form of a dividend. Colgate-Palmolive has increased its dividend for 53 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and target prices for Revlon and Colgate-Palmolive, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Revlon 0 1 0 0 2.00
Colgate-Palmolive 0 12 4 0 2.25

Revlon currently has a consensus target price of $16.00, indicating a potential downside of 25.23%. Colgate-Palmolive has a consensus target price of $76.38, indicating a potential upside of 7.27%. Given Colgate-Palmolive’s stronger consensus rating and higher probable upside, analysts clearly believe Colgate-Palmolive is more favorable than Revlon.

Profitability

This table compares Revlon and Colgate-Palmolive’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Revlon -4.35% -3.09% 0.63%
Colgate-Palmolive 15.83% 3,121.95% 20.57%

Risk & Volatility

Revlon has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500. Comparatively, Colgate-Palmolive has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500.

Valuation & Earnings

This table compares Revlon and Colgate-Palmolive’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Revlon $2.65 billion 0.42 $293.10 million ($2.20) -9.73
Colgate-Palmolive $15.18 billion 4.13 $4.42 billion $2.69 26.47

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

Summary

Colgate-Palmolive beats Revlon on 14 of the 16 factors compared between the two stocks.

Revlon Company Profile

Revlon, Inc. manufactures, markets and sells around the world a range of beauty and personal care products, including color cosmetics, hair color, hair care and hair treatments, as well as beauty tools, men’s grooming products, anti-perspirant deodorants, fragrances, skincare and other beauty care products. The Company operates through four segments: Consumer, which includes cosmetics, hair color and hair care, beauty tools, anti-perspirant deodorants, fragrances and skincare products; Professional, which includes a line of products sold to hair and nail salons, and professional salon distributors, including hair color, shampoos, conditioners, styling products, nail polishes and nail enhancements; Elizabeth Arden, which include Elizabeth Arden, which produces skin care, color cosmetics and fragrances under the Elizabeth Arden brand and Other, which includes the distribution of prestige, designer and celebrity fragrances, cosmetics and skincare products.

Colgate-Palmolive Company Profile

Colgate-Palmolive Company (Colgate) is a consumer products company. The Company operates in two product segments: Oral, Personal and Home Care, and Pet Nutrition. The Oral, Personal and Home Care product segment is operated through five geographic segments, which include North America, Latin America, Europe, Asia Pacific and Africa/Eurasia. The Company’s oral care products include Colgate Total, Colgate Sensitive Pro-Relief, Colgate Max Fresh and Colgate Optic White. The Company is also engaged in various product categories of the personal care market with operations in liquid hand soap, which it sells under the Palmolive, Protex and Softsoap brands. The Company manufactures and markets a range of products for the home care market, including Palmolive and Ajax dishwashing liquids, Fabuloso and Ajax household cleaners and Murphy’s Oil Soap. The Company, through its Hill’s Pet Nutrition segment (Hill’s), manufactures pet nutrition products for dogs and cats.

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