Contrasting L’Oreal (OTCMKTS:LRLCY) & WD-40 (NASDAQ:WDFC)

WD-40 (NASDAQ:WDFC) and L’Oreal (OTCMKTS:LRLCY) are both consumer staples companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, risk, analyst recommendations, earnings and institutional ownership.

Earnings & Valuation

This table compares WD-40 and L’Oreal”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WD-40	$619.98 million	4.49	$90.99 million	$6.57	31.38
L’Oreal	$49.83 billion	4.42	$6.93 billion	N/A	N/A

L’Oreal has higher revenue and earnings than WD-40.

Institutional and Insider Ownership

91.5% of WD-40 shares are held by institutional investors. Comparatively, 0.4% of L’Oreal shares are held by institutional investors. 0.8% of WD-40 shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for WD-40 and L’Oreal, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WD-40	0	1	1	0	2.50
L’Oreal	1	5	5	1	2.50

WD-40 currently has a consensus target price of $300.00, indicating a potential upside of 45.50%. Given WD-40’s higher probable upside, analysts plainly believe WD-40 is more favorable than L’Oreal.

Profitability

This table compares WD-40 and L’Oreal’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WD-40	14.42%	30.10%	16.79%
L’Oreal	N/A	N/A	N/A

Volatility and Risk

WD-40 has a beta of 0.25, meaning that its stock price is 75% less volatile than the S&P 500. Comparatively, L’Oreal has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500.

Dividends

WD-40 pays an annual dividend of $4.08 per share and has a dividend yield of 2.0%. L’Oreal pays an annual dividend of $1.13 per share and has a dividend yield of 1.4%. WD-40 pays out 62.1% of its earnings in the form of a dividend. WD-40 has increased its dividend for 17 consecutive years. WD-40 is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

WD-40 beats L’Oreal on 9 of the 15 factors compared between the two stocks.

About WD-40

WD-40 Company develops and sells maintenance products, and homecare and cleaning products in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company provides multi-purpose maintenance products that include aerosol sprays, non-aerosol trigger sprays, precision pens, and in liquid-bulk form products under the WD-40 Multi-Use brand name; specialty maintenance products, such as penetrants, degreasers, corrosion inhibitors, greases, lubricants, and rust removers under the WD-40 Specialist brand; and bike-specific products. It also offers multi-purpose and specialty drip oils, and spray lubricant products, as well as other specialty maintenance products under the 3-IN-ONE brand name; and professional spray maintenance products and lubricants for the bike maintenance market under the GT85 brand name. In addition, the company provides automatic toilet bowl cleaners under the 2000 Flushes brand name; aerosol and liquid trigger carpet stain and odor eliminators under the Spot Shot brand; room and rug deodorizers under the Carpet Fresh brand name; carpet and household cleaners, and rug and room deodorizers under the 1001 brand; heavy-duty hand cleaner products under the Lava brand name in the United States, as well as under the Solvol brand name in Australia; and automatic toilet bowl cleaners under the X-14 brand name. It sells its products primarily through warehouse club stores, hardware stores, automotive parts outlets, industrial distributors and suppliers, mass retail and home center stores, value retailers, grocery stores, online retailers, farm supply, sport retailers, and independent bike dealers. WD-40 Company was founded in 1953 and is headquartered in San Diego, California.

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.