Reviewing Grocery Outlet (NASDAQ:GO) & L’Oreal (OTCMKTS:LRLCY)

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

Institutional and Insider Ownership

99.9% of Grocery Outlet shares are owned by institutional investors. Comparatively, 0.4% of L’Oreal shares are owned by institutional investors. 4.5% of Grocery Outlet shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

Grocery Outlet has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500. Comparatively, L’Oreal has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Grocery Outlet	-8.08%	5.69%	1.86%
L’Oreal	N/A	N/A	N/A

Analyst Recommendations

This is a summary of current ratings and target prices for Grocery Outlet and L’Oreal, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Grocery Outlet	2	11	0	0	1.85
L’Oreal	1	6	5	1	2.46

Grocery Outlet presently has a consensus target price of $10.32, suggesting a potential upside of 27.07%. Given Grocery Outlet’s higher probable upside, equities analysts clearly believe Grocery Outlet is more favorable than L’Oreal.

Valuation & Earnings

This table compares Grocery Outlet and L’Oreal”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Grocery Outlet	$4.69 billion	0.17	-$224.91 million	($3.88)	-2.09
L’Oreal	$49.83 billion	4.42	$6.93 billion	N/A	N/A

L’Oreal has higher revenue and earnings than Grocery Outlet.

Summary

L’Oreal beats Grocery Outlet on 8 of the 13 factors compared between the two stocks.

About Grocery Outlet

Grocery Outlet Holding Corp. operates as a retailer of consumables and fresh products sold through independently operated stores in the United States. Its stores offer products in various categories, such as dairy and deli, produce, floral, fresh meat, seafood products, grocery, general merchandise, health and beauty care, frozen food, beer and wine, and ethnic products. The company was founded in 1946 and is headquartered in Emeryville, California.

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.