Financial Analysis: Procter & Gamble (NYSE:PG) & Coty (NYSE:COTY)

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

Analyst Ratings

This is a summary of recent ratings and recommmendations for Coty and Procter & Gamble, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Coty	2	11	0	0	1.85
Procter & Gamble	0	11	13	0	2.54

Coty presently has a consensus price target of $3.24, indicating a potential upside of 22.07%. Procter & Gamble has a consensus price target of $161.19, indicating a potential upside of 9.94%. Given Coty’s higher possible upside, analysts plainly believe Coty is more favorable than Procter & Gamble.

Risk & Volatility

Coty has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500. Comparatively, Procter & Gamble has a beta of 0.39, meaning that its share price is 61% less volatile than the S&P 500.

Insider and Institutional Ownership

42.4% of Coty shares are owned by institutional investors. Comparatively, 65.8% of Procter & Gamble shares are owned by institutional investors. 5.9% of Coty shares are owned by company insiders. Comparatively, 0.2% of Procter & Gamble shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Coty	-10.42%	5.68%	1.82%
Procter & Gamble	18.44%	31.36%	13.09%

Earnings & Valuation

This table compares Coty and Procter & Gamble”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Coty	$5.81 billion	0.40	-$604.80 million	($0.70)	-3.79
Procter & Gamble	$87.03 billion	3.91	$16.05 billion	$6.62	22.15

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

Summary

Procter & Gamble beats Coty on 11 of the 14 factors compared between the two stocks.

About Coty

Coty Inc., together with its subsidiaries, manufactures, markets, distributes, and sells beauty products worldwide. It operates through Prestige and Consumer Beauty segments. The company provides fragrance, color cosmetics, and skin and body care products. It offers Prestige segment products primarily through prestige retailers, including perfumeries, department stores, e-retailers, direct-to-consumer websites, and duty-free shops under the Burberry, Calvin Klein, Chloe, Davidoff, Escada, Gucci, Hugo Boss, Jil Sander, Joop!, Kylie Jenner, Lancaster, Marc Jacobs, Miu Miu, Orveda, philosophy, SKKN BY KIM, and Tiffany & Co. brands. The company provides Consumer Beauty segment products primarily through hypermarkets, supermarkets, drug stores, pharmacies, mid-tier department stores, traditional food and drug retailers, and e-commerce retailers under the Adidas, Beckham, Biocolor, Bozzano, Bourjois, Bruno Banani, CoverGirl, Jovan, Max Factor, Mexx, Monange, Nautica, Paixao, Rimmel, Risque, and Sally Hansen brands. It also sells its products through third-party distributors. The company was founded in 1904 and is headquartered in New York, New York. Coty Inc. is a subsidiary of JAB Beauty B.V.

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.