Critical Analysis: Estee Lauder Companies (NYSE:EL) versus Natural Health Trends (NASDAQ:NHTC)

Natural Health Trends (NASDAQ:NHTC) and Estee Lauder Companies (NYSE:EL) are both consumer staples companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, dividends, analyst recommendations and valuation.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Natural Health Trends and Estee Lauder Companies, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Natural Health Trends	1	0	0	0	1.00
Estee Lauder Companies	2	12	8	2	2.42

Estee Lauder Companies has a consensus price target of $104.67, suggesting a potential upside of 10.73%. Given Estee Lauder Companies’ stronger consensus rating and higher probable upside, analysts plainly believe Estee Lauder Companies is more favorable than Natural Health Trends.

Volatility & Risk

Natural Health Trends has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500. Comparatively, Estee Lauder Companies has a beta of 1.28, suggesting that its stock price is 28% more volatile than the S&P 500.

Valuation & Earnings

This table compares Natural Health Trends and Estee Lauder Companies”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Natural Health Trends	$39.78 million	0.19	-$880,000.00	($0.16)	-5.63
Estee Lauder Companies	$15.05 billion	2.27	$182.00 million	$0.49	192.90

Estee Lauder Companies has higher revenue and earnings than Natural Health Trends. Natural Health Trends is trading at a lower price-to-earnings ratio than Estee Lauder Companies, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

10.1% of Natural Health Trends shares are owned by institutional investors. Comparatively, 55.1% of Estee Lauder Companies shares are owned by institutional investors. 12.9% of Natural Health Trends shares are owned by insiders. Comparatively, 13.1% of Estee Lauder Companies shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Natural Health Trends pays an annual dividend of $0.40 per share and has a dividend yield of 44.4%. Estee Lauder Companies pays an annual dividend of $1.40 per share and has a dividend yield of 1.5%. Natural Health Trends pays out -250.0% of its earnings in the form of a dividend. Estee Lauder Companies pays out 285.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Natural Health Trends is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Natural Health Trends and Estee Lauder Companies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Natural Health Trends	-4.51%	-8.00%	-4.58%
Estee Lauder Companies	1.21%	23.52%	4.72%

Summary

Estee Lauder Companies beats Natural Health Trends on 15 of the 17 factors compared between the two stocks.

About Natural Health Trends

Natural Health Trends Corp., a direct-selling and e-commerce company, provides personal care, wellness, and lifestyle products under the NHT Global brand. The company offers wellness products, including liquid, encapsulated, tableted and powder dietary and nutritional supplements, vitamins, and minerals; and herbal products comprising herbal supplements. It also provides beauty products, such as age-defying and hydrating cleansers, creams, lotions, serums, and toners; and lifestyle products, which include weight management and energy enhancing supplements, as well as topical gels. In addition, the company offers home appliances; and daily products, such as oral care, hair care, and body care. It sells its products directly to consumers, as well as through an e-commerce retail platform in the United States, Canada, Cayman Islands, Mexico, Peru, Hong Kong, Taiwan, China, Singapore, Malaysia, Thailand, South Korea, Japan, India, Russia, Kazakhstan, and Europe. The company was formerly known as Florida Institute of Massage Therapy, Inc. and changed its name to Natural Health Trends Corp. in June 1993. Natural Health Trends Corp. was incorporated in 1988 and is headquartered in Tsim Sha Tsui, Hong Kong.

About Estee Lauder Companies

The Estée Lauder Companies Inc. manufactures, markets, and sells skin care, makeup, fragrance, and hair care products worldwide. It offers skin care products, including moisturizers, serums, cleansers, toners, body care, exfoliators, acne care and oil correctors, facial masks, and sun care products; and makeup products, such as lipsticks, lip glosses, mascaras, foundations, eyeshadows, and powders, as well as compacts, brushes, and other makeup tools. The company also provides fragrance products in various forms comprising eau de parfum sprays and colognes, as well as lotions, powders, creams, candles, and soaps; and hair care products, including shampoos, conditioners, styling products, treatment, finishing sprays, and hair color products, as well as sells ancillary products and services. It offers its products under the Estée Lauder, Clinique, Origins, M·A·C, Bobbi Brown Cosmetics, La Mer, Aveda, Jo Malone London, TOM FORD, Too Faced, Dr.Jart+, and The Ordinary brands. The company sells its products through department stores, specialty-multi retailers, upscale perfumeries and pharmacies, and salons and spas; freestanding stores; its own and authorized retailer websites; third-party online malls; stores in airports; and duty-free locations. The Estée Lauder Companies Inc. was founded in 1946 and is headquartered in New York, New York.