Herbalife (NYSE:HLF) versus Unicharm (OTCMKTS:UNICY) Critical Review

Herbalife (NYSE:HLF) and Unicharm (OTCMKTS:UNICY) are both consumer staples companies, but which is the superior business? We will compare the two companies based on the strength of their risk, profitability, dividends, institutional ownership, valuation, earnings and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Herbalife and Unicharm, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Herbalife	0	3	3	2	2.88
Unicharm	0	2	0	0	2.00

Herbalife presently has a consensus target price of $17.67, indicating a potential upside of 28.85%. Given Herbalife’s stronger consensus rating and higher possible upside, equities analysts clearly believe Herbalife is more favorable than Unicharm.

Valuation & Earnings

This table compares Herbalife and Unicharm”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Herbalife	$5.20 billion	0.28	$228.30 million	$1.55	8.85
Unicharm	$6.32 billion	1.73	$436.93 million	$0.13	24.23

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

Dividends

Herbalife pays an annual dividend of $1.20 per share and has a dividend yield of 8.8%. Unicharm pays an annual dividend of $0.04 per share and has a dividend yield of 1.3%. Herbalife pays out 77.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Unicharm pays out 30.8% of its earnings in the form of a dividend.

Profitability

This table compares Herbalife and Unicharm’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Herbalife	3.16%	-43.90%	7.89%
Unicharm	6.65%	7.19%	5.28%

Risk & Volatility

Herbalife has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500. Comparatively, Unicharm has a beta of 0.3, suggesting that its stock price is 70% less volatile than the S&P 500.

Summary

Herbalife beats Unicharm on 8 of the 15 factors compared between the two stocks.

About Herbalife

Herbalife Ltd. provides health and wellness products in North America, Mexico, South and Central America, Europe, the Middle East, Africa, China, and the Asia Pacific. It offers products in the areas of weight management; targeted nutrition; energy, sports, and fitness; outer nutrition; and literature and promotional items. The company also provides weight management products, including meal replacement products, protein shakes, drink mixes, weight loss supplements, healthy snacks, and metabolism boosting teas; targeted nutrition products, which comprise functional beverages, and dietary and nutritional supplements that contain herbs, vitamins, minerals, and other natural ingredients; outer nutrition products, such as facial skin, body, and hair care products; and energy, sports, and fitness products, including N-R-G tea and energy drink products. In addition, it offers literature, promotional, and other materials that comprise start-up kits, sales tools, and educational materials. The company sells its products through sales representatives, independent service providers, and company-operated retail platforms. Herbalife Ltd. was formerly known as Herbalife Nutrition Ltd. and changed its name to Herbalife Ltd. in April 2023. The company was founded in 1980 and is headquartered in Los Angeles, California.

About Unicharm

Unicharm Corporation engages in the manufacturing and sale of wellness, feminine, baby and children, kirei, and pet care products in Japan and internationally. The company's baby and child care products, including disposable diapers and wipes under the Moony, MamyPoko, Oyasumiman, and Torepanman brands; feminine care products comprise napkins, tampons, panty liners, sanitary short, panty liners, and other feminine care products under the Sofy, Center-In, and Unicharm brand names; and wellness care products include napkin-type incontinence pads, pants-type diapers, tape-type diapers, pants-type specialized urine pads, and tape-type specialized urine pads under the Lifree and Charmnap brand. It also provides masks under the Unicharm brand; home care products, including cleaning sheets under the Wave brand name; cosmetic cotton and wet wipes under the Silcot brand; and paper towels under the Cook Up brand name. In addition, the company offers pet care products that include pet foods, excrement cleanup sheets, system toilets, and disposable diapers under the Grand Deli, Best Balance, Physicalife Dog, Silver Plate, Aiken Genki, Manner Wear, Deo Sheet, Silver Spoon, AllWell, Physicalife Cat, Deo Toilet, Deo Sand, Deo Clean, and Neko Genki brands; and deodorizing beads. Further, it is involved in the manufacture and sale of industrial materials related products, etc., as well as food-packaging materials. Unicharm Corporation was incorporated in 1941 and is headquartered in Tokyo, Japan.