Reviewing Hengan International Group (OTCMKTS:HEGIF) and Procter & Gamble (NYSE:PG)

Hengan International Group (OTCMKTS:HEGIF) and Procter & Gamble (NYSE:PG) are both consumer defensive companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, risk, institutional ownership, profitability, valuation and earnings.

Dividends

Hengan International Group pays an annual dividend of $1.85 per share and has a dividend yield of 49.8%. Procter & Gamble pays an annual dividend of $3.76 per share and has a dividend yield of 2.4%. Hengan International Group pays out 62.7% of its earnings in the form of a dividend. Procter & Gamble pays out 63.7% 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 increased its dividend for 68 consecutive years. Hengan International Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Hengan International Group and Procter & Gamble’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hengan International Group	N/A	N/A	N/A
Procter & Gamble	17.87%	32.88%	12.35%

Institutional and Insider Ownership

18.3% of Hengan International Group shares are owned by institutional investors. Comparatively, 63.4% of Procter & Gamble shares are owned by institutional investors. 0.2% of Procter & Gamble shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Hengan International Group 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
Hengan International Group	N/A	N/A	N/A	$2.95	1.26
Procter & Gamble	$82.01 billion	4.44	$14.65 billion	$5.90	26.19

Procter & Gamble has higher revenue and earnings than Hengan International Group. Hengan International Group is trading at a lower price-to-earnings ratio than Procter & Gamble, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Hengan International Group and Procter & Gamble, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hengan International Group	0	0	1	0	3.00
Procter & Gamble	0	5	12	0	2.71

Procter & Gamble has a consensus price target of $164.82, indicating a potential upside of 6.67%. Given Procter & Gamble’s higher possible upside, analysts clearly believe Procter & Gamble is more favorable than Hengan International Group.

Summary

Procter & Gamble beats Hengan International Group on 11 of the 14 factors compared between the two stocks.

About Hengan International Group

Hengan International Group Company Limited, an investment holding company, manufactures, distributes, and sells personal hygiene products in the People's Republic of China and internationally. The company offers pocket handkerchiefs, box and soft tissue papers, kitchen towels/papers, toilet rolls, first-aid products, enema, garbage and food bags, preservation papers, table cloths and disposable toilet brush, sanitary napkins, pantiliners, overnight pants, wet tissues, maternal and child care products, adult and baby diapers, and cleansing products. It is also involved in the trading of various products for ladies, pregnant women, infants, and kids, as well as disposable fiber-based products; and engages in the ecommerce business. In addition, the company manufactures and distributes heat and power; and manufactures, distributes, and sells gas, protective equipment, medical instrument, skin care products, antiseptics, and household products. Hengan International Group Company Limited was founded in 1985 and is headquartered in Jinjiang, the People's Republic of China.

About Procter & Gamble

The Procter & Gamble Company provides branded consumer packaged goods worldwide. It operates through five segments: Beauty; Grooming; Health Care; Fabric & Home Care; and Baby, Feminine & Family Care. The Beauty segment offers conditioners, shampoos, styling aids, and treatments under the Head & Shoulders, Herbal Essences, Pantene, and Rejoice brands; and antiperspirants and deodorants, personal cleansing, and skin care products under the Olay, Old Spice, Safeguard, Secret, and SK-II brands. The Grooming segment provides shave care products and appliances under the Braun, Gillette, and Venus brand names. The Health Care segment offers toothbrushes, toothpastes, and other oral care products under the Crest and Oral-B brand names; and gastrointestinal, rapid diagnostics, respiratory, vitamins/minerals/supplements, pain relief, and other personal health care products under the Metamucil, Neurobion, Pepto-Bismol, and Vicks brands. The Fabric & Home Care segment provides fabric enhancers, laundry additives, and laundry detergents under the Ariel, Downy, Gain, and Tide brands; and air care, dish care, P&G professional, and surface care products under the Cascade, Dawn, Fairy, Febreze, Mr. Clean, and Swiffer brands. The Baby, Feminine & Family Care segment offers baby wipes, taped diapers, and pants under the Luvs and Pampers brands; adult incontinence and feminine care products under the Always, Always Discreet, and Tampax brands; and paper towels, tissues, and toilet papers under the Bounty, Charmin, and Puffs brands. The company sells its products primarily through mass merchandisers, e-commerce, grocery stores, membership club stores, drug stores, department stores, distributors, wholesalers, specialty beauty stores, high-frequency stores, pharmacies, electronics stores, and professional channels, as well as directly to consumers. The Procter & Gamble Company was founded in 1837 and is headquartered in Cincinnati, Ohio.