Procter & Gamble Company (The) (NYSE: PG) and Herbalife LTD. (NYSE:HLF) are both mid-cap consumer staples companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, analyst recommendations, risk, earnings and dividends.

Profitability

This table compares Procter & Gamble Company (The) and Herbalife LTD.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Procter & Gamble Company (The) 23.56% 19.97% 8.86%
Herbalife LTD. 9.28% 216.82% 14.15%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Procter & Gamble Company (The) and Herbalife LTD., as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Procter & Gamble Company (The) 2 8 7 0 2.29
Herbalife LTD. 0 2 2 0 2.50

Procter & Gamble Company (The) currently has a consensus price target of $87.93, indicating a potential downside of 3.86%. Herbalife LTD. has a consensus price target of $86.67, indicating a potential upside of 12.12%. Given Herbalife LTD.’s stronger consensus rating and higher probable upside, analysts clearly believe Herbalife LTD. is more favorable than Procter & Gamble Company (The).

Valuation & Earnings

This table compares Procter & Gamble Company (The) and Herbalife LTD.’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Procter & Gamble Company (The) $65.06 billion 3.58 $17.51 billion $5.59 16.36
Herbalife LTD. $4.42 billion 1.58 $727.70 million $4.76 16.24

Procter & Gamble Company (The) has higher revenue and earnings than Herbalife LTD.. Herbalife LTD. is trading at a lower price-to-earnings ratio than Procter & Gamble Company (The), indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

59.3% of Procter & Gamble Company (The) shares are held by institutional investors. 0.4% of Procter & Gamble Company (The) shares are held by insiders. Comparatively, 5.0% of Herbalife LTD. shares are held 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.

Dividends

Procter & Gamble Company (The) pays an annual dividend of $2.76 per share and has a dividend yield of 3.0%. Herbalife LTD. does not pay a dividend. Procter & Gamble Company (The) pays out 49.4% of its earnings in the form of a dividend. Herbalife LTD. has increased its dividend for 60 consecutive years.

Risk & Volatility

Procter & Gamble Company (The) has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500. Comparatively, Herbalife LTD. has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500.

Summary

Procter & Gamble Company (The) beats Herbalife LTD. on 9 of the 17 factors compared between the two stocks.

Procter & Gamble Company (The) Company Profile

The Procter & Gamble Company is focused on providing branded consumer packaged goods to the consumers across the world. The Company operates through five segments: Beauty; Grooming; Health Care; Fabric & Home Care, and Baby, Feminine & Family Care. The Company sells its products in approximately 180 countries and territories primarily through mass merchandisers, grocery stores, membership club stores, drug stores, department stores, distributors, baby stores, specialty beauty stores, e-commerce, high-frequency stores and pharmacies. It offers products under the brands, such as Olay, Old Spice, Safeguard, Head & Shoulders, Pantene, Rejoice, Mach3, Prestobarba, Venus, Cascade, Dawn, Febreze, Mr. Clean, Bounty and Charmin.

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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