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

Profitability

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

Net Margins Return on Equity Return on Assets
Procter & Gamble 15.34% 20.66% 8.99%
e.l.f. Beauty 12.40% 13.88% 5.73%

Volatility & Risk

Procter & Gamble has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500. Comparatively, e.l.f. Beauty has a beta of 1.68, suggesting that its share price is 68% more volatile than the S&P 500.

Insider & Institutional Ownership

61.0% of Procter & Gamble shares are held by institutional investors. Comparatively, 87.7% of e.l.f. Beauty shares are held by institutional investors. 0.4% of Procter & Gamble shares are held by insiders. Comparatively, 16.5% of e.l.f. Beauty shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Procter & Gamble and e.l.f. Beauty’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Procter & Gamble $65.06 billion 2.96 $15.33 billion $3.74 20.43
e.l.f. Beauty $269.89 million 3.27 $33.47 million $0.68 27.75

Procter & Gamble has higher revenue and earnings than e.l.f. Beauty. Procter & Gamble 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.

Dividends

Procter & Gamble pays an annual dividend of $2.76 per share and has a dividend yield of 3.6%. e.l.f. Beauty does not pay a dividend. Procter & Gamble pays out 73.8% of its earnings in the form of a dividend. Procter & Gamble has increased its dividend for 61 consecutive years.

Analyst Ratings

This is a summary of recent recommendations for Procter & Gamble and e.l.f. Beauty, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Procter & Gamble 1 8 6 0 2.33
e.l.f. Beauty 1 4 4 0 2.33

Procter & Gamble currently has a consensus target price of $84.69, suggesting a potential upside of 10.84%. e.l.f. Beauty has a consensus target price of $22.20, suggesting a potential upside of 17.65%. Given e.l.f. Beauty’s higher probable upside, analysts clearly believe e.l.f. Beauty is more favorable than Procter & Gamble.

Summary

Procter & Gamble beats e.l.f. Beauty on 9 of the 16 factors compared between the two stocks.

Procter & Gamble Company Profile

The Procter & Gamble Company is focused on providing branded consumer packaged goods to the consumers across the world. The Company operates through five segments: Beauty; Grooming; Health Care; Fabric & Home Care, and Baby, Feminine & Family Care. The Company sells its products in approximately 180 countries and territories primarily through mass merchandisers, grocery stores, membership club stores, drug stores, department stores, distributors, baby stores, specialty beauty stores, e-commerce, high-frequency stores and pharmacies. It offers products under the brands, such as Olay, Old Spice, Safeguard, Head & Shoulders, Pantene, Rejoice, Mach3, Prestobarba, Venus, Cascade, Dawn, Febreze, Mr. Clean, Bounty and Charmin.

e.l.f. Beauty Company Profile

e.l.f. Beauty, Inc., formerly J.A. Cosmetics Holdings, Inc., is a cosmetic company. The Company conducts its business under the name e.l.f. Cosmetics, and offers products for eyes, lips and face to consumers through its retail customers, e.l.f. stores and e-commerce channels. The Company offers a range of products for eyes, such as eyeshadow, eyeliner, mascara and eyelashes, eyebrows, concealer and primer, brushes and tools, and sets and palettes. The Company offers lipstick, lip gloss, lipliner, and lip care and brushes. The Company launches its products on elfcosmetics.com, and distribution is generally only broadened to its retail customers after it receives consumer validation online. The Company sells its products in national and international retailers (with international primarily serviced by distributors) and direct-to-consumer channels. It sells its products in retail stores in the United States across mass, drug store, food and specialty retail channels.

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