Analyzing Nutraceutical International Corporation (NUTR) & Medifast (MED)

Medifast (NYSE: MED) and Nutraceutical International Corporation (NASDAQ:NUTR) are both small-cap consumer staples companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitabiliy, earnings, valuation and risk.

Insider and Institutional Ownership

93.4% of Medifast shares are owned by institutional investors. Comparatively, 78.8% of Nutraceutical International Corporation shares are owned by institutional investors. 6.5% of Medifast shares are owned by insiders. Comparatively, 13.1% of Nutraceutical International Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Medifast and Nutraceutical International Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Medifast 7.23% 24.94% 19.58%
Nutraceutical International Corporation 7.84% 10.59% 7.81%

Analyst Recommendations

This is a summary of current ratings for Medifast and Nutraceutical International Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Medifast 0 2 0 0 2.00
Nutraceutical International Corporation 0 0 0 0 N/A

Medifast presently has a consensus target price of $36.00, suggesting a potential downside of 12.04%. Given Medifast’s higher possible upside, equities analysts clearly believe Medifast is more favorable than Nutraceutical International Corporation.

Volatility and Risk

Medifast has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500. Comparatively, Nutraceutical International Corporation has a beta of 0.49, suggesting that its share price is 51% less volatile than the S&P 500.

Dividends

Medifast pays an annual dividend of $1.28 per share and has a dividend yield of 3.1%. Nutraceutical International Corporation pays an annual dividend of $0.25 per share and has a dividend yield of 0.6%. Medifast pays out 77.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Nutraceutical International Corporation pays out 12.5% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Medifast and Nutraceutical International Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Medifast $272.81 million 1.79 $40.16 million $1.65 24.81
Nutraceutical International Corporation $235.37 million 1.64 $43.04 million $2.00 20.85

Nutraceutical International Corporation has higher revenue, but lower earnings than Medifast. Nutraceutical International Corporation is trading at a lower price-to-earnings ratio than Medifast, indicating that it is currently the more affordable of the two stocks.

Summary

Medifast beats Nutraceutical International Corporation on 9 of the 14 factors compared between the two stocks.

Medifast Company Profile

Medifast, Inc. is engaged in the production, distribution and sale of weight loss, weight management and healthy living products, and other consumable health and nutritional products. Medifast product lines include weight loss, weight management, and healthy living meal replacements, snacks, hydration products and vitamins. The Company provides weight loss, weight management and healthy living products and programs through multiple channels of distribution, which include Take Shape For Life; its direct to consumer business unit through its Website and in-house call centers; Franchise Medifast Weight Control Centers, and a national network of physicians. The Company offers a range of weight loss, weight management and healthy products under the Medifast, OPTAVIA, Thrive by Medifast, Optimal Health by Take Shape For Life, Flavors of Home and Essential 1 brands. The Company also offers a sports nutrition pilot product line, Dual Fuel.

Nutraceutical International Corporation Company Profile

Nutraceutical International Corporation is an integrated manufacturer, marketer, distributor and retailer of nutritional supplements and other natural products. The Company’s products include vitamins and minerals; herbs; specialty formulas; personal care products; liquid nutritional products; homeopathics; functional foods, and other products. It offers its products to and through domestic health and natural food stores. It acts as a distributor to the Healthy Foods Channel and to certain international markets for certain third-party brands. It manufactures and sells nutritional supplements and other natural products under numerous brands, including Solaray, KAL, Dynamic Health, Nature’s Life, LifeTime, Natural Balance, NaturalCare, Health from the Sun, Pioneer, Nutra BioGenesis, Life-flo, Organix South, Heritage Store and Monarch Nutraceuticals. It owns various natural food markets, such as The Real Food Company, Thom’s Natural Foods, Cornucopia Community Market and Granola’s.

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