Critical Review: Hengan International Group (OTCMKTS:HEGIY) & Interparfums (NASDAQ:IPAR)

Interparfums (NASDAQ:IPAR) and Hengan International Group (OTCMKTS:HEGIY) are both mid-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, risk, earnings and valuation.

Risk and Volatility

Interparfums has a beta of 1.25, meaning that its stock price is 25% more volatile than the S&P 500. Comparatively, Hengan International Group has a beta of 0.14, meaning that its stock price is 86% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Interparfums and Hengan International Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Interparfums	0	2	5	1	2.88
Hengan International Group	0	0	0	0	0.00

Interparfums currently has a consensus target price of $121.00, indicating a potential upside of 48.87%. Given Interparfums’ stronger consensus rating and higher possible upside, equities analysts plainly believe Interparfums is more favorable than Hengan International Group.

Institutional and Insider Ownership

55.6% of Interparfums shares are owned by institutional investors. Comparatively, 0.0% of Hengan International Group shares are owned by institutional investors. 43.7% of Interparfums shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Interparfums and Hengan International Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Interparfums	11.24%	16.31%	11.22%
Hengan International Group	N/A	N/A	N/A

Valuation & Earnings

This table compares Interparfums and Hengan International Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Interparfums	$1.45 billion	1.79	$164.36 million	$5.11	15.91
Hengan International Group	$3.15 billion	1.36	$319.73 million	N/A	N/A

Hengan International Group has higher revenue and earnings than Interparfums.

Dividends

Interparfums pays an annual dividend of $3.20 per share and has a dividend yield of 3.9%. Hengan International Group pays an annual dividend of $0.84 per share and has a dividend yield of 4.6%. Interparfums pays out 62.6% of its earnings in the form of a dividend. Interparfums has increased its dividend for 4 consecutive years.

Summary

Interparfums beats Hengan International Group on 12 of the 16 factors compared between the two stocks.

About Interparfums

Inter Parfums, Inc., together with its subsidiaries, manufactures, markets, and distributes a range of fragrances and fragrance related products in the United States and internationally. It operates in two segments, European Based Operations and United States Based Operations. The company offers its fragrance and cosmetic products under the Boucheron, Coach, Jimmy Choo, Karl Lagerfeld, Kate Spade, Lanvin, Moncler, Montblanc, Rochas, S.T. Dupont, Van Cleef & Arpels, Abercrombie & Fitch, Anna Sui, Donna Karan, DKNY, Emanual Ungaro, Ferragamo, Graff, GUESS, Hollister, MCM, Oscar de la Renta, Ungaro, and Roberto Cavalli brands, as well as French Connection, Intimate, and Dunhill, Lacoste names. It sells its products to department stores, perfumeries, specialty stores, duty free shops, and domestic and international wholesalers, and distributors, as well as through e-commerce. The company was formerly known as Jean Philippe Fragrances, Inc. and changed its name to Inter Parfums, Inc. in July 1999. Inter Parfums, Inc. was founded in 1982 and is headquartered in New York, New York.

About Hengan International Group

Hengan International Group Company Limited, an investment holding company, manufactures, distributes, and sells personal hygiene products in the People's Republic of China and internationally. The company offers pocket handkerchiefs, box and soft tissue papers, kitchen towels/papers, toilet rolls, first-aid products, enema, garbage and food bags, preservation papers, table cloths and disposable toilet brush, sanitary napkins, pantiliners, overnight pants, wet tissues, maternal and child care products, adult and baby diapers, and cleansing products. It is also involved in the trading of various products for ladies, pregnant women, infants, and kids, as well as disposable fiber-based products; and engages in the ecommerce business. In addition, the company manufactures and distributes heat and power; and manufactures, distributes, and sells gas, protective equipment, medical instrument, skin care products, antiseptics, and household products. Hengan International Group Company Limited was founded in 1985 and is headquartered in Jinjiang, the People's Republic of China.