Avon Products (NYSE: AVP) and Herbalife LTD. (NYSE:HLF) are both consumer staples companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitabiliy, dividends, institutional ownership, risk and earnings.
Valuation & Earnings
This table compares Avon Products and Herbalife LTD.’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Avon Products||$5.74 billion||0.28||$437.20 million||($0.01)||-364.64|
|Herbalife LTD.||$4.47 billion||1.41||$502.80 million||$2.87||24.09|
Herbalife LTD. has higher revenue, but lower earnings than Avon Products. Avon Products is trading at a lower price-to-earnings ratio than Herbalife LTD., indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Avon Products has a beta of 1.82, meaning that its stock price is 82% more volatile than the S&P 500. Comparatively, Herbalife LTD. has a beta of 1.22, meaning that its stock price is 22% more volatile than the S&P 500.
Institutional & Insider Ownership
87.1% of Avon Products shares are owned by institutional investors. 1.3% of Avon Products shares are owned by insiders. Comparatively, 5.0% of Herbalife LTD. shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
This table compares Avon Products and Herbalife LTD.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of current ratings and recommmendations for Avon Products and Herbalife LTD., as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Avon Products presently has a consensus target price of $5.90, suggesting a potential upside of 61.64%. Herbalife LTD. has a consensus target price of $86.67, suggesting a potential upside of 25.37%. Given Avon Products’ higher probable upside, equities research analysts plainly believe Avon Products is more favorable than Herbalife LTD..
Herbalife LTD. beats Avon Products on 8 of the 13 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.
Herbalife LTD. Company Profile
Herbalife Ltd. is a global nutrition company. The Company develops and sells weight management, healthy meals and snacks, sports and fitness, energy and targeted nutritional products, as well as personal care products. Its operating segments are based on geographical operations in six regions: North America; Mexico; South and Central America; Europe, the Middle East, and Africa (EMEA); Asia Pacific, and China. The Company categorizes its products into five groups: weight management, targeted nutrition, energy, sports and fitness, outer nutrition, and literature, promotional and other. As of December 31, 2016, it marketed and sold approximately 140 products encompassing over 4,700 stock keeping units (SKUs) globally. Its product categories include meal replacement; protein shakes; drink mixes; dietary and nutritional supplements containing herbs, vitamins, minerals and other natural ingredients; facial skin care; body care; hair care products; sales tools, and educational materials.
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