Critical Analysis: Estee Lauder Companies (EL) & DS Healthcare Group (OTCMKTS:DSKX)

DS Healthcare Group (OTCMKTS: DSKX) and Estee Lauder Companies (NYSE:EL) are both consumer staples companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, profitability, risk, institutional ownership, dividends, valuation and earnings.

Analyst Recommendations

This is a breakdown of current ratings and price targets for DS Healthcare Group and Estee Lauder Companies, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DS Healthcare Group 0 0 0 0 N/A
Estee Lauder Companies 0 6 16 0 2.73

Estee Lauder Companies has a consensus target price of $118.17, suggesting a potential downside of 8.06%. Given Estee Lauder Companies’ higher probable upside, analysts clearly believe Estee Lauder Companies is more favorable than DS Healthcare Group.

Volatility & Risk

DS Healthcare Group has a beta of 2.31, indicating that its share price is 131% more volatile than the S&P 500. Comparatively, Estee Lauder Companies has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500.

Dividends

Estee Lauder Companies pays an annual dividend of $1.52 per share and has a dividend yield of 1.2%. DS Healthcare Group does not pay a dividend. Estee Lauder Companies pays out 41.1% of its earnings in the form of a dividend. Estee Lauder Companies has raised its dividend for 4 consecutive years.

Valuation & Earnings

This table compares DS Healthcare Group and Estee Lauder Companies’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
DS Healthcare Group $12.95 million 0.01 -$6.93 million ($0.27) -0.02
Estee Lauder Companies $11.82 billion 4.00 $1.25 billion $3.70 34.74

Estee Lauder Companies has higher revenue and earnings than DS Healthcare Group. DS Healthcare Group is trading at a lower price-to-earnings ratio than Estee Lauder Companies, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

0.0% of DS Healthcare Group shares are held by institutional investors. Comparatively, 53.6% of Estee Lauder Companies shares are held by institutional investors. 19.4% of DS Healthcare Group shares are held by insiders. Comparatively, 16.2% of Estee Lauder Companies shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares DS Healthcare Group and Estee Lauder Companies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DS Healthcare Group -62.31% -1,304.25% -117.85%
Estee Lauder Companies 11.30% 33.64% 12.39%

Summary

Estee Lauder Companies beats DS Healthcare Group on 13 of the 16 factors compared between the two stocks.

DS Healthcare Group Company Profile

DS Healthcare Group, Inc., doing business as DS Laboratories, is a personal care, product development and marketing company. The Company develops and markets branded personal care products that address thinning hair conditions, skin care and other personal care needs. It develops technologies and products for hair care and personal care needs. Its technologies include Liposome Technology, which acts as a carrier agent, and is designed to enhance the act ion of the active ingredients in its products, and Nanosome Technology, which acts as a delivery vehicle, and is designed to infuse active compounds into targeted cells. The Company products are primarily sold under its DS Laboratories brand. It also sells certain products under its Polaris Labs and Sigma Skin brands. It markets and sells these products through salons, spas, department stores, specialty retailers and distributors. The Company offers products under three product categories: Hair Care, Skin Care and Personal Care.

Estee Lauder Companies Company Profile

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.

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