Reviewing L’Oreal (OTCMKTS:LRLCY) & Natural Alternatives International (NASDAQ:NAII)

Natural Alternatives International (NASDAQ:NAII) 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 earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Profitability

This table compares Natural Alternatives International and L’Oreal’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Natural Alternatives International	-10.13%	-12.21%	-5.30%
L’Oreal	N/A	N/A	N/A

Volatility and Risk

Natural Alternatives International has a beta of 0.36, indicating that its share price is 64% less volatile than the S&P 500. Comparatively, L’Oreal has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500.

Institutional & Insider Ownership

32.4% of Natural Alternatives International shares are held by institutional investors. Comparatively, 0.4% of L’Oreal shares are held by institutional investors. 20.8% of Natural Alternatives International shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Natural Alternatives International and L’Oreal”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Natural Alternatives International	$141.87 million	0.10	-$13.57 million	($2.39)	-0.90
L’Oreal	$49.83 billion	4.82	$6.93 billion	N/A	N/A

L’Oreal has higher revenue and earnings than Natural Alternatives International.

Analyst Ratings

This is a breakdown of recent recommendations for Natural Alternatives International and L’Oreal, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Natural Alternatives International	1	0	0	0	1.00
L’Oreal	1	4	7	1	2.62

L’Oreal has a consensus target price of $100.00, indicating a potential upside of 10.79%. Given L’Oreal’s stronger consensus rating and higher possible upside, analysts plainly believe L’Oreal is more favorable than Natural Alternatives International.

Summary

L’Oreal beats Natural Alternatives International on 11 of the 13 factors compared between the two stocks.

About Natural Alternatives International

Natural Alternatives International, Inc. engages in formulating, manufacturing, and marketing nutritional supplements in the United States, Europe, Australia, Asia, Mexico, and Canada. The company operates in two segments, Private-Label Contract Manufacturing, and Patent and Trademark Licensing. It offers private-label contract manufacturing services to companies that market and distribute vitamins, minerals, herbal, and other nutritional supplements, as well as other health care products. The company also provides strategic partnering services, such as customized product formulation, clinical study design and support, manufacturing, marketing support, international regulatory and label law compliance, international product registration, packaging in multiple formats and labeling design, scientific research, proprietary ingredients, customer-specific nutritional product formulation, product testing and evaluation, marketing management, packaging and delivery system design, regulatory review, and international product registration assistance. In addition, it sells beta-alanine ingredient under the CarnoSyn and SR CarnoSyn names. The company manufactures products in various forms, including capsules, tablets, chewable wafers, and powders. Its private-label contract manufacturing customers include companies that market nutritional supplements through direct sales marketing channels, direct to consumer e-commerce channels, and retail stores. The company was founded in 1980 and is headquartered in Carlsbad, California.

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.