Critical Review: L’Oreal (OTCMKTS:LRLCY) and Yatsen (NYSE:YSG)

Yatsen (NYSE:YSG) and L’Oreal (OTCMKTS:LRLCY) are both consumer staples companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, earnings, risk, dividends, analyst recommendations and profitability.

Insider & Institutional Ownership

0.4% of L’Oreal shares are owned by institutional investors. 29.0% of Yatsen 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 Yatsen and L’Oreal’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Yatsen	-14.05%	-16.35%	-12.83%
L’Oreal	N/A	N/A	N/A

Valuation & Earnings

This table compares Yatsen and L’Oreal”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Yatsen	$464.90 million	1.32	-$97.02 million	($0.76)	-8.59
L’Oreal	$47.06 billion	4.67	$6.93 billion	N/A	N/A

L’Oreal has higher revenue and earnings than Yatsen.

Volatility and Risk

Yatsen has a beta of -2.12, indicating that its share price is 312% less volatile than the S&P 500. Comparatively, L’Oreal has a beta of 0.95, indicating that its share price is 5% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Yatsen and L’Oreal, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Yatsen	1	0	0	0	1.00
L’Oreal	2	4	1	2	2.33

Summary

L’Oreal beats Yatsen on 11 of the 12 factors compared between the two stocks.

About Yatsen

Yatsen Holding Limited, together with its subsidiaries, engages in the development and sale of beauty products under the Perfect Diary, Little Ondine, Pink Bear, Abby’s Choice, GalÃnic, DR.WU, Eve Lom, and EANTiM brands in the People’s Republic of China. The company offers color cosmetics for lips, eyes, and face; skin care products, including face serums and creams, eye creams, masks, toners, makeup removers, cleansers, ampoules, and anti-acne patches; and beauty tools and kits, sunscreen products, and beauty devices. It sells its products through stores and online channel. The company was formerly known as Mangrove Bay Ecommerce Holding (Cayman) and changed its name to Yatsen Holding Limited in January 2019. Yatsen Holding Limited was founded in 2016 and is headquartered in Guangzhou, China.

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.