Contrasting ARKO (NASDAQ:ARKO) & L’Oreal (OTCMKTS:LRLCY)

L’Oreal (OTCMKTS:LRLCY) and ARKO (NASDAQ:ARKO) are both consumer staples companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, profitability and valuation.

Earnings and Valuation

This table compares L’Oreal and ARKO”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
L’Oreal	$49.83 billion	4.56	$6.93 billion	N/A	N/A
ARKO	$7.64 billion	0.09	$22.74 million	$0.14	45.29

L’Oreal has higher revenue and earnings than ARKO.

Dividends

L’Oreal pays an annual dividend of $1.13 per share and has a dividend yield of 1.3%. ARKO pays an annual dividend of $0.12 per share and has a dividend yield of 1.9%. ARKO pays out 85.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of recent recommendations and price targets for L’Oreal and ARKO, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
L’Oreal	1	5	5	2	2.62
ARKO	1	2	1	1	2.40

ARKO has a consensus price target of $7.00, indicating a potential upside of 10.41%. Given ARKO’s higher possible upside, analysts clearly believe ARKO is more favorable than L’Oreal.

Profitability

This table compares L’Oreal and ARKO’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
ARKO	0.30%	8.58%	0.63%

Institutional and Insider Ownership

0.4% of L’Oreal shares are held by institutional investors. Comparatively, 78.3% of ARKO shares are held by institutional investors. 22.5% of ARKO shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

L’Oreal has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500. Comparatively, ARKO has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500.

Summary

L’Oreal beats ARKO on 8 of the 15 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 ARKO

Arko Corp. operates convenience stores in the United States. It operates through Retail, Wholesale, Fleet Fueling, and GPMP segments. The Retail segment engages in the sale of fuel and merchandise to retail consumers. Its Wholesale segment supplies fuel to third-party dealers and consignment agents. The Fleet Fueling segment supplies fuel to proprietary and third-party cardlock, and issuance of proprietary fuel cards. Its GPMP segment supplies fuel to retail and wholesale segments. The company is based in Richmond, Virginia.