L'Oréal (OTCMKTS:LRLCY) and L'Air Liquide (OTCMKTS:AIQUY) are both large-cap consumer staples companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, institutional ownership, profitability, valuation, analyst recommendations, risk and earnings.
Dividends
L'Oréal pays an annual dividend of $0.68 per share and has a dividend yield of 0.8%. L'Air Liquide pays an annual dividend of $0.44 per share and has a dividend yield of 1.3%. L'Oréal pays out 54.4% of its earnings in the form of a dividend. L'Air Liquide pays out 41.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. L'Air Liquide is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk and Volatility
L'Oréal has a beta of 0.53, suggesting that its stock price is 47% less volatile than the S&P 500. Comparatively, L'Air Liquide has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500.
Valuation and Earnings
This table compares L'Oréal and L'Air Liquide's revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| L'Oréal | $33.46 billion | 6.74 | $4.20 billion | $1.25 | 64.47 |
| L'Air Liquide | $24.55 billion | 3.23 | $2.51 billion | $1.07 | 31.35 |
L'Oréal has higher revenue and earnings than L'Air Liquide. L'Air Liquide is trading at a lower price-to-earnings ratio than L'Oréal, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares L'Oréal and L'Air Liquide's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| L'Oréal | N/A | N/A | N/A |
| L'Air Liquide | N/A | N/A | N/A |
Analyst Recommendations
This is a summary of recent recommendations and price targets for L'Oréal and L'Air Liquide, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| L'Oréal | 2 | 3 | 8 | 0 | 2.46 |
| L'Air Liquide | 0 | 4 | 5 | 0 | 2.56 |
L'Oréal presently has a consensus price target of $76.00, indicating a potential downside of 5.70%. Given L'Oréal's higher probable upside, equities analysts plainly believe L'Oréal is more favorable than L'Air Liquide.
Insider & Institutional Ownership
0.7% of L'Oréal shares are owned by institutional investors. Comparatively, 0.2% of L'Air Liquide shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Summary
L'Oréal beats L'Air Liquide on 8 of the 12 factors compared between the two stocks.
