Critical Contrast: L’Oreal (OTCMKTS:LRLCY) and Natural Alternatives International (NASDAQ:NAII)

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

Risk & Volatility

L’Oreal has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500. Comparatively, Natural Alternatives International has a beta of 0.36, suggesting that its stock price is 64% less volatile than the S&P 500.

Profitability

This table compares L’Oreal and Natural Alternatives International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
L’Oreal	N/A	N/A	N/A
Natural Alternatives International	-10.13%	-12.21%	-5.30%

Valuation & Earnings

This table compares L’Oreal and Natural Alternatives International”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
L’Oreal	$49.83 billion	4.57	$6.93 billion	N/A	N/A
Natural Alternatives International	$129.86 million	0.10	-$13.57 million	($2.39)	-0.86

L’Oreal has higher revenue and earnings than Natural Alternatives International.

Analyst Recommendations

This is a breakdown of current ratings for L’Oreal and Natural Alternatives International, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
L’Oreal	1	4	7	1	2.62
Natural Alternatives International	1	0	0	0	1.00

Insider & Institutional Ownership

0.4% of L’Oreal shares are owned by institutional investors. Comparatively, 32.4% of Natural Alternatives International shares are owned by institutional investors. 20.8% of Natural Alternatives International shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

L’Oreal beats Natural Alternatives International on 10 of the 12 factors compared between the two stocks.

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.

About Natural Alternatives International

Natural Alternatives International, Inc. engages in formulating, manufacturing, and marketing nutritional supplements in the United States, Europe, Australia, Asia, Mexico, and Canada. The company operates in two segments, Private-Label Contract Manufacturing, and Patent and Trademark Licensing. It offers private-label contract manufacturing services to companies that market and distribute vitamins, minerals, herbal, and other nutritional supplements, as well as other health care products. The company also provides strategic partnering services, such as customized product formulation, clinical study design and support, manufacturing, marketing support, international regulatory and label law compliance, international product registration, packaging in multiple formats and labeling design, scientific research, proprietary ingredients, customer-specific nutritional product formulation, product testing and evaluation, marketing management, packaging and delivery system design, regulatory review, and international product registration assistance. In addition, it sells beta-alanine ingredient under the CarnoSyn and SR CarnoSyn names. The company manufactures products in various forms, including capsules, tablets, chewable wafers, and powders. Its private-label contract manufacturing customers include companies that market nutritional supplements through direct sales marketing channels, direct to consumer e-commerce channels, and retail stores. The company was founded in 1980 and is headquartered in Carlsbad, California.