Critical Analysis: Herbalife (HLF) & DS Healthcare Group (DSKX)

Herbalife (NYSE: HLF) and DS Healthcare Group (OTCMKTS:DSKX) are both retail/wholesale companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, institutional ownership, valuation, profitability, earnings and dividends.

Analyst Ratings

This is a summary of current recommendations for Herbalife and DS Healthcare Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Herbalife 0 2 2 0 2.50
DS Healthcare Group 0 0 0 0 N/A

Herbalife currently has a consensus target price of $86.67, suggesting a potential upside of 25.24%. Given Herbalife’s higher probable upside, analysts plainly believe Herbalife is more favorable than DS Healthcare Group.

Risk and Volatility

Herbalife has a beta of 1.27, indicating that its share price is 27% more volatile than the S&P 500. Comparatively, DS Healthcare Group has a beta of -0.19, indicating that its share price is 119% less volatile than the S&P 500.

Profitability

This table compares Herbalife and DS Healthcare Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Herbalife 8.60% 176.64% 12.03%
DS Healthcare Group -62.31% -1,304.25% -117.85%

Institutional and Insider Ownership

0.0% of DS Healthcare Group shares are held by institutional investors. 5.0% of Herbalife shares are held by insiders. Comparatively, 19.4% of DS Healthcare Group shares are held by 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.

Earnings & Valuation

This table compares Herbalife and DS Healthcare Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Herbalife $4.49 billion 1.34 $260.00 million $4.41 15.69
DS Healthcare Group $12.95 million 0.02 -$6.93 million ($0.28) -0.04

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

Summary

Herbalife beats DS Healthcare Group on 10 of the 12 factors compared between the two stocks.

About Herbalife

Herbalife 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.

About DS Healthcare Group

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.

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