Estee Lauder Companies, Inc. (The) (EL) vs. Nu Skin Enterprises (NUS) Critical Review

Estee Lauder Companies, Inc. (The) (NYSE: EL) and Nu Skin Enterprises (NYSE:NUS) are both mid-cap consumer staples companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, earnings, risk and institutional ownership.

Analyst Ratings

This is a summary of recent ratings for Estee Lauder Companies, Inc. (The) and Nu Skin Enterprises, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Estee Lauder Companies, Inc. (The) 0 4 16 0 2.80
Nu Skin Enterprises 2 2 3 0 2.14

Estee Lauder Companies, Inc. (The) presently has a consensus price target of $110.37, suggesting a potential upside of 0.09%. Nu Skin Enterprises has a consensus price target of $61.86, suggesting a potential upside of 0.52%. Given Nu Skin Enterprises’ higher probable upside, analysts clearly believe Nu Skin Enterprises is more favorable than Estee Lauder Companies, Inc. (The).

Valuation & Earnings

This table compares Estee Lauder Companies, Inc. (The) and Nu Skin Enterprises’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Estee Lauder Companies, Inc. (The) $11.82 billion 3.43 $2.35 billion $3.35 32.92
Nu Skin Enterprises $2.18 billion 1.49 $326.95 million $2.95 20.86

Estee Lauder Companies, Inc. (The) has higher revenue and earnings than Nu Skin Enterprises. Nu Skin Enterprises is trading at a lower price-to-earnings ratio than Estee Lauder Companies, Inc. (The), indicating that it is currently the more affordable of the two stocks.

Dividends

Estee Lauder Companies, Inc. (The) pays an annual dividend of $1.36 per share and has a dividend yield of 1.2%. Nu Skin Enterprises pays an annual dividend of $1.44 per share and has a dividend yield of 2.3%. Estee Lauder Companies, Inc. (The) pays out 40.6% of its earnings in the form of a dividend. Nu Skin Enterprises pays out 48.8% 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. Estee Lauder Companies, Inc. (The) has increased its dividend for 16 consecutive years and Nu Skin Enterprises has increased its dividend for 3 consecutive years.

Profitability

This table compares Estee Lauder Companies, Inc. (The) and Nu Skin Enterprises’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Estee Lauder Companies, Inc. (The) 10.56% 32.38% 11.90%
Nu Skin Enterprises 7.53% 24.14% 11.26%

Risk and Volatility

Estee Lauder Companies, Inc. (The) has a beta of 0.67, indicating that its share price is 33% less volatile than the S&P 500. Comparatively, Nu Skin Enterprises has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500.

Insider & Institutional Ownership

54.6% of Estee Lauder Companies, Inc. (The) shares are held by institutional investors. Comparatively, 79.3% of Nu Skin Enterprises shares are held by institutional investors. 17.0% of Estee Lauder Companies, Inc. (The) shares are held by insiders. Comparatively, 5.2% of Nu Skin Enterprises shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Estee Lauder Companies, Inc. (The) beats Nu Skin Enterprises on 13 of the 17 factors compared between the two stocks.

Estee Lauder Companies, Inc. (The) Company Profile

The Estee Lauder Companies Inc. manufactures and markets skin care, makeup, fragrance and hair care products. The Company offers products, including skin care, makeup, fragrance, hair care and other. The Company operates in beauty products segment. The Company’s products are sold in over 150 countries and territories under brand names, including Estee Lauder, Aramis, Clinique, Prescriptives, Lab Series, Origins, Tommy Hilfiger, MAC, Kiton, La Mer, Bobbi Brown, Donna Karan New York, DKNY, Aveda, Jo Malone London, Bumble and bumble, Michael Kors, Darphin, Tom Ford, Smashbox, Ermenegildo Zegna, AERIN, Tory Burch, RODIN olio lusso, Le Labo, Editions de Parfums Frederic Malle, GLAMGLOW, By Kilian, BECCA and Too Faced. Its skin care products include moisturizers, serums, cleansers, toners, body care, exfoliators, acne and oil correctors, facial masks, cleansing devices and sun care products.

Nu Skin Enterprises Company Profile

Nu Skin Enterprises, Inc. is a direct selling company that develops and distributes personal care products and nutritional supplements, and a range of other products and services. The Company offers anti-aging personal care products and nutritional supplements under its Nu Skin and Pharmanex brands. The Nu Skin brand offers a range of products, including ageLOC Me customized skin care system, ageLOC Spa systems and ageLOC Transformation anti-aging skin care system. The Pharmanex product line includes ageLOC Youth nutritional supplement, ageLOC TR90 weight management and body shaping system, and LifePak nutritional supplements. The Company has operations in various geographic regions, including Greater China, North Asia, Americas, South Asia/Pacific, and Europe, the Middle East and Africa (EMEA). It is focused on offering ageLOC Youth nutritional supplement and ageLOC Me personalized skin care system. The Company also offers household products and technology services.

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