Reviewing L’Oreal (OTCMKTS:LRLCY) and ARKO (NASDAQ:ARKO)

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

Risk & Volatility

L’Oreal has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500. Comparatively, ARKO has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500.

Institutional & Insider Ownership

0.4% of L’Oreal shares are held by institutional investors. Comparatively, 78.3% of ARKO shares are held by institutional investors. 22.5% of ARKO shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares L’Oreal and ARKO”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
L’Oreal	$49.83 billion	5.01	$6.93 billion	N/A	N/A
ARKO	$7.64 billion	0.09	$20.84 million	$0.14	45.93

L’Oreal has higher revenue and earnings than ARKO.

Analyst Ratings

This is a breakdown of recent ratings and target prices for L’Oreal and ARKO, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
L’Oreal	1	5	5	2	2.62
ARKO	1	2	1	1	2.40

ARKO has a consensus target price of $7.00, suggesting a potential upside of 8.86%. Given ARKO’s higher probable upside, analysts plainly believe ARKO is more favorable than L’Oreal.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
L’Oreal	N/A	N/A	N/A
ARKO	0.30%	8.60%	0.63%

Dividends

L’Oreal pays an annual dividend of $1.13 per share and has a dividend yield of 1.2%. ARKO pays an annual dividend of $0.12 per share and has a dividend yield of 1.9%. ARKO pays out 85.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

L’Oreal beats ARKO on 8 of the 15 factors compared between the two stocks.

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.

About ARKO

Arko Corp. operates convenience stores in the United States. It operates through Retail, Wholesale, Fleet Fueling, and GPMP segments. The Retail segment engages in the sale of fuel and merchandise to retail consumers. Its Wholesale segment supplies fuel to third-party dealers and consignment agents. The Fleet Fueling segment supplies fuel to proprietary and third-party cardlock, and issuance of proprietary fuel cards. Its GPMP segment supplies fuel to retail and wholesale segments. The company is based in Richmond, Virginia.