Critical Review: Unicharm (OTCMKTS:UNICY) versus e.l.f. Beauty (NYSE:ELF)

e.l.f. Beauty (NYSE:ELF) and Unicharm (OTCMKTS:UNICY) are both consumer staples companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, valuation and profitability.

Insider and Institutional Ownership

92.4% of e.l.f. Beauty shares are held by institutional investors. 3.5% of e.l.f. Beauty 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.

Valuation and Earnings

This table compares e.l.f. Beauty and Unicharm”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
e.l.f. Beauty	$1.64 billion	3.37	$26.32 million	$1.00	93.55
Unicharm	$6.32 billion	1.68	$436.93 million	$0.13	23.54

Unicharm has higher revenue and earnings than e.l.f. Beauty. Unicharm is trading at a lower price-to-earnings ratio than e.l.f. Beauty, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares e.l.f. Beauty and Unicharm’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
e.l.f. Beauty	3.38%	14.07%	6.81%
Unicharm	6.65%	7.15%	5.25%

Volatility and Risk

e.l.f. Beauty has a beta of 1.58, indicating that its share price is 58% more volatile than the S&P 500. Comparatively, Unicharm has a beta of 0.31, indicating that its share price is 69% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for e.l.f. Beauty and Unicharm, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
e.l.f. Beauty	1	5	10	2	2.72
Unicharm	0	1	0	1	3.00

e.l.f. Beauty presently has a consensus target price of $90.81, suggesting a potential downside of 2.92%. Given e.l.f. Beauty’s higher possible upside, equities analysts clearly believe e.l.f. Beauty is more favorable than Unicharm.

Summary

e.l.f. Beauty beats Unicharm on 11 of the 15 factors compared between the two stocks.

About e.l.f. Beauty

e.l.f. Beauty, Inc. is a holding company, which engages in the provision of inclusive, accessible, clean, vegan and cruelty free cosmetics and skin care products. The company focuses on the e-commerce, national retailers and international business channels. Its brands include elf, elf skin, WELL People and KEYS soulcare. The company was founded in 2004 and is headquartered in Oakland, CA.

About Unicharm

Unicharm Corporation engages in the manufacturing and sale of wellness, feminine, baby and children, kirei, and pet care products in Japan and internationally. The company's baby and child care products, including disposable diapers and wipes under the Moony, MamyPoko, Oyasumiman, and Torepanman brands; feminine care products comprise napkins, tampons, panty liners, sanitary short, panty liners, and other feminine care products under the Sofy, Center-In, and Unicharm brand names; and wellness care products include napkin-type incontinence pads, pants-type diapers, tape-type diapers, pants-type specialized urine pads, and tape-type specialized urine pads under the Lifree and Charmnap brand. It also provides masks under the Unicharm brand; home care products, including cleaning sheets under the Wave brand name; cosmetic cotton and wet wipes under the Silcot brand; and paper towels under the Cook Up brand name. In addition, the company offers pet care products that include pet foods, excrement cleanup sheets, system toilets, and disposable diapers under the Grand Deli, Best Balance, Physicalife Dog, Silver Plate, Aiken Genki, Manner Wear, Deo Sheet, Silver Spoon, AllWell, Physicalife Cat, Deo Toilet, Deo Sand, Deo Clean, and Neko Genki brands; and deodorizing beads. Further, it is involved in the manufacture and sale of industrial materials related products, etc., as well as food-packaging materials. Unicharm Corporation was incorporated in 1941 and is headquartered in Tokyo, Japan.