Critical Survey: BJ’s Wholesale Club (NYSE:BJ) vs. L’Oreal (OTCMKTS:LRLCY)

L’Oreal (OTCMKTS:LRLCY) and BJ’s Wholesale Club (NYSE:BJ) are both large-cap consumer staples companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, risk, profitability, dividends and valuation.

Analyst Recommendations

This is a breakdown of recent ratings for L’Oreal and BJ’s Wholesale Club, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
L’Oreal	2	4	7	1	2.50
BJ’s Wholesale Club	1	8	9	0	2.44

BJ’s Wholesale Club has a consensus target price of $105.27, indicating a potential upside of 20.23%. Given BJ’s Wholesale Club’s higher possible upside, analysts clearly believe BJ’s Wholesale Club is more favorable than L’Oreal.

Valuation & Earnings

This table compares L’Oreal and BJ’s Wholesale Club”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
L’Oreal	$49.83 billion	4.73	$6.93 billion	N/A	N/A
BJ’s Wholesale Club	$21.46 billion	0.52	$578.38 million	$4.35	20.13

L’Oreal has higher revenue and earnings than BJ’s Wholesale Club.

Volatility and Risk

L’Oreal has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500. Comparatively, BJ’s Wholesale Club has a beta of 0.22, meaning that its share price is 78% less volatile than the S&P 500.

Insider & Institutional Ownership

0.4% of L’Oreal shares are owned by institutional investors. Comparatively, 98.6% of BJ’s Wholesale Club shares are owned by institutional investors. 1.1% of BJ’s Wholesale Club shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares L’Oreal and BJ’s Wholesale Club’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
L’Oreal	N/A	N/A	N/A
BJ’s Wholesale Club	2.62%	26.67%	7.59%

Summary

BJ’s Wholesale Club beats L’Oreal on 7 of the 13 factors compared between the two stocks.

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.

About BJ’s Wholesale Club

BJ’s Wholesale Club Holdings, Inc. engages in the operation of membership warehouse clubs. Its product categories include grocery, household and pet, television and electronics, furniture, computer and tablets, patio and outdoor living, lawn and garden, baby and kids, toys, home, health and beauty, appliances, and jewelry. The company was founded in 1984 and is headquartered in Marlborough, MA.