Critical Contrast: Procter & Gamble (NYSE:PG) & Coty (NYSE:COTY)

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

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Coty	$5.81 billion	0.38	-$604.80 million	($0.70)	-3.60
Procter & Gamble	$87.03 billion	3.90	$16.05 billion	$6.62	22.09

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.

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%

Volatility & Risk

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

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Coty	2	11	0	0	1.85
Procter & Gamble	0	10	13	0	2.57

Coty currently has a consensus price target of $3.24, indicating a potential upside of 28.61%. Procter & Gamble has a consensus price target of $161.55, indicating a potential upside of 10.46%. Given Coty’s higher possible upside, equities analysts clearly believe Coty is more favorable than Procter & Gamble.

Dividends

Coty pays an annual dividend of $0.50 per share and has a dividend yield of 19.8%. Procter & Gamble pays an annual dividend of $4.35 per share and has a dividend yield of 3.0%. Coty pays out -71.4% of its earnings in the form of a dividend. Procter & Gamble pays out 65.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Procter & Gamble has raised its dividend for 70 consecutive years. Coty is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & 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 insiders. Comparatively, 0.2% of Procter & Gamble shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Procter & Gamble beats Coty on 12 of the 17 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.