Procter & Gamble (NYSE:PG) versus Natural Alternatives International (NASDAQ:NAII) Critical Contrast

Procter & Gamble (NYSE:PG) and Natural Alternatives International (NASDAQ:NAII) are both consumer staples companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, profitability, institutional ownership, valuation and earnings.

Volatility and Risk

Procter & Gamble has a beta of 0.39, suggesting that its stock price is 61% less volatile than the S&P 500. Comparatively, Natural Alternatives International has a beta of 0.35, suggesting that its stock price is 65% less volatile than the S&P 500.

Valuation and Earnings

This table compares Procter & Gamble and Natural Alternatives International”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Procter & Gamble	$87.03 billion	4.04	$16.05 billion	$6.62	22.88
Natural Alternatives International	$142.51 million	0.05	-$20.69 million	($3.42)	-0.35

Procter & Gamble has higher revenue and earnings than Natural Alternatives International. Natural Alternatives International is trading at a lower price-to-earnings ratio than Procter & Gamble, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Procter & Gamble and Natural Alternatives International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Procter & Gamble	18.44%	31.36%	13.09%
Natural Alternatives International	-14.52%	-16.51%	-6.95%

Insider & Institutional Ownership

65.8% of Procter & Gamble shares are owned by institutional investors. Comparatively, 32.4% of Natural Alternatives International shares are owned by institutional investors. 0.2% of Procter & Gamble shares are owned by insiders. Comparatively, 20.8% of Natural Alternatives International shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and target prices for Procter & Gamble and Natural Alternatives International, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Procter & Gamble	0	10	14	0	2.58
Natural Alternatives International	1	0	0	0	1.00

Procter & Gamble presently has a consensus target price of $161.70, indicating a potential upside of 6.78%. Given Procter & Gamble’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Procter & Gamble is more favorable than Natural Alternatives International.

Summary

Procter & Gamble beats Natural Alternatives International on 13 of the 14 factors compared between the two stocks.

About Procter & Gamble

Procter & Gamble Co. engages in the provision of branded consumer packaged goods. It operates through the following segments: Beauty, Grooming, Health Care, Fabric and Home Care, and Baby, Feminine and Family Care. The Beauty segment offers hair, skin, and personal care. The Grooming segment consists of shave care like female and male blades and razors, pre and post shave products, and appliances. The Health Care segment includes oral care products like toothbrushes, toothpaste, and personal health care such as gastrointestinal, rapid diagnostics, respiratory, and vitamins, minerals, and supplements. The Fabric and Home care segment consists of fabric enhancers, laundry additives and detergents, and air, dish, and surface care. The Baby, Feminine and Family Care segment sells baby wipes, diapers, and pants, adult incontinence, feminine care, paper towels, tissues, and toilet paper. The company was founded by William Procter and James Gamble in 1837 and is headquartered in Cincinnati, OH.

About Natural Alternatives International

Natural Alternatives International, Inc. engages in formulating, manufacturing, and marketing nutritional supplements in the United States, Europe, Australia, Asia, Mexico, and Canada. The company operates in two segments, Private-Label Contract Manufacturing, and Patent and Trademark Licensing. It offers private-label contract manufacturing services to companies that market and distribute vitamins, minerals, herbal, and other nutritional supplements, as well as other health care products. The company also provides strategic partnering services, such as customized product formulation, clinical study design and support, manufacturing, marketing support, international regulatory and label law compliance, international product registration, packaging in multiple formats and labeling design, scientific research, proprietary ingredients, customer-specific nutritional product formulation, product testing and evaluation, marketing management, packaging and delivery system design, regulatory review, and international product registration assistance. In addition, it sells beta-alanine ingredient under the CarnoSyn and SR CarnoSyn names. The company manufactures products in various forms, including capsules, tablets, chewable wafers, and powders. Its private-label contract manufacturing customers include companies that market nutritional supplements through direct sales marketing channels, direct to consumer e-commerce channels, and retail stores. The company was founded in 1980 and is headquartered in Carlsbad, California.