Critical Comparison: L’Oreal (OTCMKTS:LRLCY) and Church & Dwight (NYSE:CHD)

Church & Dwight (NYSE:CHD) and L’Oreal (OTCMKTS:LRLCY) are both large-cap consumer staples companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, analyst recommendations, dividends, earnings and risk.

Dividends

Church & Dwight pays an annual dividend of $1.18 per share and has a dividend yield of 1.4%. L’Oreal pays an annual dividend of $1.12 per share and has a dividend yield of 1.4%. Church & Dwight pays out 37.1% of its earnings in the form of a dividend. Church & Dwight has increased its dividend for 29 consecutive years.

Profitability

This table compares Church & Dwight and L’Oreal’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Church & Dwight	8.66%	19.27%	9.55%
L’Oreal	N/A	N/A	N/A

Analyst Ratings

This is a breakdown of recent ratings and price targets for Church & Dwight and L’Oreal, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Church & Dwight	5	7	6	0	2.06
L’Oreal	2	4	1	2	2.33

Church & Dwight currently has a consensus price target of $99.00, indicating a potential upside of 14.06%. Given Church & Dwight’s higher probable upside, equities analysts clearly believe Church & Dwight is more favorable than L’Oreal.

Insider & Institutional Ownership

86.6% of Church & Dwight shares are held by institutional investors. Comparatively, 0.4% of L’Oreal shares are held by institutional investors. 1.2% of Church & Dwight shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Church & Dwight and L’Oreal”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Church & Dwight	$6.14 billion	3.39	$585.30 million	$3.18	27.29
L’Oreal	$47.06 billion	4.63	$6.93 billion	N/A	N/A

L’Oreal has higher revenue and earnings than Church & Dwight.

Risk & Volatility

Church & Dwight has a beta of 0.42, indicating that its stock price is 58% less volatile than the S&P 500. Comparatively, L’Oreal has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500.

About Church & Dwight

Church & Dwight Co., Inc. engages in the development, manufacture, and marketing of household, personal care, and specialty products. It operates through the following segments: Consumer Domestic, Consumer International, Specialty Products Division (SPD), and Corporate. The Consumer Domestic segment offers household products, such as laundry detergents, fabric softener sheets, cat litter, household cleaning products, and personal care products including antiperspirants, oral care products, depilatories, reproductive health products, oral analgesics, nasal saline moisturizers, and dietary supplements. The Consumer International segment is involved in the personal care, household and over-the-counter products in international subsidiary markets, including Australia, Canada, France, Germany, Japan, Mexico, China, and the United Kingdom. The SPD segment consists of sales to businesses and participates in three product areas namely, animal nutrition, specialty chemicals, and commercial and professional. The Corporate segment includes equity in earnings of affiliates. The company was founded by Dwight John and Austin Church in 1846 and is headquartered in Ewing, NJ.

About L’Oreal

L'Oréal S.A., through its subsidiaries, manufactures and sells cosmetic products for women and men worldwide. The company operates through four divisions: Consumer Products, L'oréal Luxe, Professional Products, and Dermatological Beauty. It offers skincare, make-up, hair colourants, haircare, perfumes, and hygiene products. The company provides its products under the L'Oréal Paris, Garnier, Maybelline New York, NYX Professional Makeup, Stylenanda, Essie, Dark & Lovely, Mixa, Magic Mask, Niley, Lancôme, Yves Saint Laurent, Armani, Kiehl's Since 1851, Helena Rubinstein, Biotherm, Shu Uemura, IT Cosmetics, Ralph Lauren Fragrance, Urban Decay, Mugler, Valentino, Viktor&Rolf, Azzaro, Prada, Cacharel, Maison Margela Fragrance, Diesel, Yue Sai, Atelier Colonge, Carita, Takami, Aesop, L'Oréal Professionnel Paris, Kérastase, Redken, Matrix, Pureology, Pulp Riot, La Roche-Posay, Vichy, CeraVe, SkinCeuticals, and Skinbetter Science brands. It sells its products through distribution channels, such as hair salons, local stores, e-commerce, travel retail, mass market retail, department store perfumeries, pharmacies, drug stores, medi-spas, and free-standing stores. L'Oréal S.A. was founded in 1909 and is headquartered in Clichy, France.