Estee Lauder Companies, Inc. (The) (NYSE: EL) and Colgate-Palmolive (NYSE:CL) are both large-cap consumer staples companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, earnings, profitabiliy and analyst recommendations.
Risk and Volatility
Estee Lauder Companies, Inc. (The) has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500. Comparatively, Colgate-Palmolive has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500.
Profitability
This table compares Estee Lauder Companies, Inc. (The) and Colgate-Palmolive’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Estee Lauder Companies, Inc. (The) | 9.62% | 33.40% | 12.32% |
| Colgate-Palmolive | 16.31% | 3,725.55% | 20.54% |
Institutional and Insider Ownership
54.4% of Estee Lauder Companies, Inc. (The) shares are owned by institutional investors. Comparatively, 73.5% of Colgate-Palmolive shares are owned by institutional investors. 17.0% of Estee Lauder Companies, Inc. (The) shares are owned by insiders. Comparatively, 1.0% of Colgate-Palmolive shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Earnings & Valuation
This table compares Estee Lauder Companies, Inc. (The) and Colgate-Palmolive’s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Estee Lauder Companies, Inc. (The) | $11.58 billion | 3.08 | $2.35 billion | $2.99 | 32.48 |
| Colgate-Palmolive | $15.20 billion | 4.19 | $4.43 billion | $2.77 | 26.03 |
Colgate-Palmolive has higher revenue and earnings than Estee Lauder Companies, Inc. (The). Colgate-Palmolive 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.
Analyst Recommendations
This is a summary of recent recommendations for Estee Lauder Companies, Inc. (The) and Colgate-Palmolive, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Estee Lauder Companies, Inc. (The) | 1 | 4 | 13 | 0 | 2.67 |
| Colgate-Palmolive | 0 | 11 | 2 | 0 | 2.15 |
Estee Lauder Companies, Inc. (The) presently has a consensus price target of $96.93, indicating a potential downside of 0.18%. Colgate-Palmolive has a consensus price target of $74.73, indicating a potential upside of 3.66%. Given Colgate-Palmolive’s higher possible upside, analysts clearly believe Colgate-Palmolive is more favorable than Estee Lauder Companies, Inc. (The).
Dividends
Estee Lauder Companies, Inc. (The) pays an annual dividend of $1.36 per share and has a dividend yield of 1.4%. Colgate-Palmolive pays an annual dividend of $1.60 per share and has a dividend yield of 2.2%. Estee Lauder Companies, Inc. (The) pays out 45.5% of its earnings in the form of a dividend. Colgate-Palmolive pays out 57.8% 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 raised its dividend for 53 consecutive years and Colgate-Palmolive has raised its dividend for 3 consecutive years.
Summary
Colgate-Palmolive beats Estee Lauder Companies, Inc. (The) on 10 of the 17 factors compared between the two stocks.
About Estee Lauder Companies, Inc. (The)
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.
About Colgate-Palmolive
Colgate-Palmolive Company (Colgate) is a consumer products company. The Company operates in two product segments: Oral, Personal and Home Care, and Pet Nutrition. The Oral, Personal and Home Care product segment is operated through five geographic segments, which include North America, Latin America, Europe, Asia Pacific and Africa/Eurasia. The Company’s oral care products include Colgate Total, Colgate Sensitive Pro-Relief, Colgate Max Fresh and Colgate Optic White. The Company is also engaged in various product categories of the personal care market with operations in liquid hand soap, which it sells under the Palmolive, Protex and Softsoap brands. The Company manufactures and markets a range of products for the home care market, including Palmolive and Ajax dishwashing liquids, Fabuloso and Ajax household cleaners and Murphy’s Oil Soap. The Company, through its Hill’s Pet Nutrition segment (Hill’s), manufactures pet nutrition products for dogs and cats.
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