Contrasting Estee Lauder Companies (NYSE:EL) and European Wax Center (NASDAQ:EWCZ)

Estee Lauder Companies (NYSE:EL) and European Wax Center (NASDAQ:EWCZ) are both consumer staples companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, dividends, risk, earnings and valuation.

Valuation and Earnings

This table compares Estee Lauder Companies and European Wax Center”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Estee Lauder Companies	$14.79 billion	2.16	$390.00 million	($2.42)	-36.63
European Wax Center	$216.92 million	1.48	$10.46 million	$0.20	29.05

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

Volatility & Risk

Estee Lauder Companies has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500. Comparatively, European Wax Center has a beta of 1.5, indicating that its share price is 50% more volatile than the S&P 500.

Insider & Institutional Ownership

55.2% of Estee Lauder Companies shares are held by institutional investors. Comparatively, 82.1% of European Wax Center shares are held by institutional investors. 12.8% of Estee Lauder Companies shares are held by insiders. Comparatively, 5.0% of European Wax Center shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Estee Lauder Companies and European Wax Center’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Estee Lauder Companies	-5.89%	15.60%	3.57%
European Wax Center	4.38%	23.65%	3.35%

Analyst Ratings

This is a summary of recent recommendations and price targets for Estee Lauder Companies and European Wax Center, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Estee Lauder Companies	0	15	6	1	2.36
European Wax Center	1	4	2	0	2.14

Estee Lauder Companies presently has a consensus price target of $74.45, suggesting a potential downside of 16.01%. European Wax Center has a consensus price target of $7.00, suggesting a potential upside of 20.48%. Given European Wax Center’s higher possible upside, analysts plainly believe European Wax Center is more favorable than Estee Lauder Companies.

Summary

Estee Lauder Companies beats European Wax Center on 8 of the 15 factors compared between the two stocks.

About Estee Lauder Companies

The Estée Lauder Companies Inc. manufactures, markets, and sells skin care, makeup, fragrance, and hair care products worldwide. It offers skin care products, including moisturizers, serums, cleansers, toners, body care, exfoliators, acne care and oil correctors, facial masks, and sun care products; and makeup products, such as lipsticks, lip glosses, mascaras, foundations, eyeshadows, and powders, as well as compacts, brushes, and other makeup tools. The company also provides fragrance products in various forms comprising eau de parfum sprays and colognes, as well as lotions, powders, creams, candles, and soaps; and hair care products, including shampoos, conditioners, styling products, treatment, finishing sprays, and hair color products, as well as sells ancillary products and services. It offers its products under the Estée Lauder, Clinique, Origins, M·A·C, Bobbi Brown Cosmetics, La Mer, Aveda, Jo Malone London, TOM FORD, Too Faced, Dr.Jart+, and The Ordinary brands. The company sells its products through department stores, specialty-multi retailers, upscale perfumeries and pharmacies, and salons and spas; freestanding stores; its own and authorized retailer websites; third-party online malls; stores in airports; and duty-free locations. The Estée Lauder Companies Inc. was founded in 1946 and is headquartered in New York, New York.

About European Wax Center

European Wax Center, Inc. operates as the franchisor and operator of out-of-home waxing services in the United States. It offers body and facial waxing services; and pre- and post-service products, including ingrown hair serums, exfoliating gels, brow shapers, and skin treatments. The company was founded in 2004 and is headquartered in Plano, Texas.