Reviewing Reynolds Consumer Products (NASDAQ:REYN) & Luvu Brands (OTCMKTS:LUVU)

Reynolds Consumer Products (NASDAQ:REYN) and Luvu Brands (OTCMKTS:LUVU) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, earnings, institutional ownership, valuation and risk.

Analyst Ratings

This is a summary of recent ratings and price targets for Reynolds Consumer Products and Luvu Brands, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Reynolds Consumer Products	0	7	2	0	2.22
Luvu Brands	0	0	0	0	0.00

Reynolds Consumer Products currently has a consensus target price of $26.75, suggesting a potential upside of 9.45%. Given Reynolds Consumer Products’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Reynolds Consumer Products is more favorable than Luvu Brands.

Profitability

This table compares Reynolds Consumer Products and Luvu Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Reynolds Consumer Products	8.20%	15.88%	7.01%
Luvu Brands	-1.81%	-16.86%	-4.96%

Earnings and Valuation

This table compares Reynolds Consumer Products and Luvu Brands”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Reynolds Consumer Products	$3.70 billion	1.39	$352.00 million	$1.46	16.74
Luvu Brands	$24.69 million	0.12	-$450,000.00	($0.01)	-4.00

Reynolds Consumer Products has higher revenue and earnings than Luvu Brands. Luvu Brands is trading at a lower price-to-earnings ratio than Reynolds Consumer Products, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

26.8% of Reynolds Consumer Products shares are owned by institutional investors. 0.2% of Reynolds Consumer Products shares are owned by insiders. Comparatively, 45.9% of Luvu Brands shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

Reynolds Consumer Products has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500. Comparatively, Luvu Brands has a beta of 1.55, indicating that its share price is 55% more volatile than the S&P 500.

Summary

Reynolds Consumer Products beats Luvu Brands on 12 of the 14 factors compared between the two stocks.

About Reynolds Consumer Products

Reynolds Consumer Products Inc. produces and sells products in cooking, waste and storage, and tableware product categories in the United States and internationally. It operates through four segments: Reynolds Cooking & Baking, Hefty Waste & Storage, Hefty Tableware, and Presto Products. The Reynolds Cooking & Baking segment produces aluminum foil, disposable aluminum pans, parchment paper, freezer paper, wax paper, butcher paper, plastic wrap, baking cups, oven bags, and slow cooker liners under the Reynolds Wrap, Reynolds KITCHENS, and EZ Foil brands in the United States, as well as under the ALCAN brand in Canada and under the Diamond brand internationally. The Hefty Waste & Storage segment offers trash bags under the Hefty Ultra Strong and Hefty Strong brands; and food storage bags under the Hefty and Baggies brands. This segment also provides a suite of products, including compostable bags, bags made from recycled materials, and the orange bags. The Hefty Tableware segment offers disposable and compostable plates, bowls, platters, cups, and cutlery under the Hefty brand. The Presto Products segment primarily sells store brand products in food storage bags, trash bags, reusable storage containers, and plastic wrap categories. It offers both branded and store brand products to grocery stores, mass merchants, warehouse clubs, discount chains, dollar stores, drug stores, home improvement stores, military outlets, and eCommerce retailers. The company was founded in 1947 and is headquartered in Lake Forest, Illinois. Reynolds Consumer Products Inc. is a subsidiary of Packaging Finance Limited.

About Luvu Brands

Luvu Brands, Inc. designs, manufactures, and markets various consumer lifestyle products worldwide. The company offers sensuality and intimacy products under the Liberator brand; and bed therapy products, which assistive in relieving medical conditions associated with acid reflux, surgery recovery, and chronic pain under the Avana brand. It also provides daybeds, sofas, and beanbags made from virgin and re-purposed polyurethane foam under the Jaxx brand. In addition, the company is involved in the purchase and resale of products to e-merchants, retailers, and e-commerce sites, as well as provision of contract manufacturing and fulfillment services. It markets its products through various websites comprising liberator.com, jaxxliving.com, and avanacomfort.com, as well as through distributors, retailers, and e-tailers across various channels of adult, mass market, drug, and specialty accounts. The company was formerly known as Liberator, Inc. and changed its name to Luvu Brands, Inc. in November 2015. Luvu Brands, Inc. was incorporated in 1999 and is headquartered in Atlanta, Georgia.