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Avon Products (AVP) vs. Herbalife LTD. (HLF) Head-To-Head Review

Avon Products (NYSE: AVP) and Herbalife LTD. (NYSE:HLF) are both consumer staples companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, profitabiliy, analyst recommendations, valuation, earnings, risk and dividends. Risk and Volatility

Avon Products has a beta of 1.83, suggesting that its stock price is 83% more volatile than the S&P 500. Comparatively, Herbalife LTD. has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500. Analyst Recommendations

This is a summary of current ratings and price targets for Avon Products and Herbalife LTD., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Avon Products 0 3 2 0 2.40
Herbalife LTD. 0 2 2 0 2.50

Avon Products currently has a consensus price target of £5.90, indicating a potential upside of 63.89%. Herbalife LTD. has a consensus price target of £86.67, indicating a potential upside of 28.89%. Given Avon Products’ higher possible upside, analysts clearly believe Avon Products is more favorable than Herbalife LTD..

Earnings and Valuation This table compares Avon Products and Herbalife LTD.’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Avon Products £5.74 billion 0.28 £437.20 million (£0.01) -359.64
Herbalife LTD. £4.47 billion 1.37 £502.80 million £2.87 23.43

Herbalife LTD. has higher revenue, but lower earnings than Avon Products. Avon Products is trading at a lower price-to-earnings ratio than Herbalife LTD., indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

87.1% of Avon Products shares are owned by institutional investors.

1.3% of Avon Products shares are owned by insiders. Comparatively, 5.0% of Herbalife LTD. 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.

Profitability This table compares Avon Products and Herbalife LTD.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Avon Products 0.26% -3.68% 0.83%
Herbalife LTD. 5.58% 262.58% 14.51%

Summary Herbalife LTD. beats Avon Products on 8 of the 13 factors compared between the two stocks.

About Avon Products Avon Products logoAvon Products, Inc. is a manufacturer and marketer of beauty and related products. The Company’s segments include Europe, Middle East & Africa; South Latin America; North Latin America, and Asia Pacific.

Its product categories are Beauty, and Fashion and Home. Beauty consists of skincare (which includes personal care), fragrance and color (cosmetics). Fashion and Home consists of fashion jewelry, watches, apparel, footwear, accessories, gift and decorative products, housewares, entertainment and leisure products, children’s products and nutritional products.

The Company’s products include Anew Ultimate Supreme Advanced Performance Creme, Anew Vitale Visible Perfection Blurring Treatment, Big & Multiplied Volume Mascara, Avon True Perfectly Matte Lipstick, Avon Life for Him and for Her Fragrances, Far Away Infinity Fragrance and Avon Nutra Effects body collection with Active Seed Complex. The Company primarily sells its products to the consumer through the direct-selling channel. About Herbalife LTD.

Herbalife LTD. logoHerbalife Ltd. is a global nutrition company. The Company develops and sells weight management, healthy meals and snacks, sports and fitness, energy and targeted nutritional products, as well as personal care products. Its operating segments are based on geographical operations in six regions: North America; Mexico; South and Central America; Europe, the Middle East, and Africa (EMEA); Asia Pacific, and China.

The Company categorizes its products into five groups: weight management, targeted nutrition, energy, sports and fitness, outer nutrition, and literature, promotional and other. As of December 31, 2016, it marketed and sold approximately 140 products encompassing over 4,700 stock keeping units (SKUs) globally. Its product categories include meal replacement; protein shakes; drink mixes; dietary and nutritional supplements containing herbs, vitamins, minerals and other natural ingredients; facial skin care; body care; hair care products; sales tools, and educational materials.

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References

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