Critical Contrast: NutriSystem (NTRI) & Weight Watchers International (NYSE:WTW)
NutriSystem (NASDAQ: NTRI) and Weight Watchers International (NYSE:WTW) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitabiliy, institutional ownership, valuation, earnings and dividends.
Insider and Institutional Ownership
92.5% of NutriSystem shares are owned by institutional investors. Comparatively, 86.4% of Weight Watchers International shares are owned by institutional investors. 2.4% of NutriSystem shares are owned by insiders. Comparatively, 15.8% of Weight Watchers International shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Volatility and Risk
NutriSystem has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500. Comparatively, Weight Watchers International has a beta of 3.05, meaning that its stock price is 205% more volatile than the S&P 500.
This is a breakdown of recent ratings and price targets for NutriSystem and Weight Watchers International, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Weight Watchers International||1||1||0||0||1.50|
NutriSystem presently has a consensus target price of $56.22, indicating a potential downside of 1.88%. Weight Watchers International has a consensus target price of $23.00, indicating a potential downside of 38.45%. Given NutriSystem’s stronger consensus rating and higher possible upside, research analysts clearly believe NutriSystem is more favorable than Weight Watchers International.
This table compares NutriSystem and Weight Watchers International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Weight Watchers International||7.51%||-6.30%||6.06%|
NutriSystem pays an annual dividend of $0.70 per share and has a dividend yield of 1.2%. Weight Watchers International does not pay a dividend. NutriSystem pays out 51.9% of its earnings in the form of a dividend.
Valuation & Earnings
This table compares NutriSystem and Weight Watchers International’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|NutriSystem||$596.02 million||2.85||$74.32 million||$1.35||42.44|
|Weight Watchers International||$1.19 billion||2.02||$270.11 million||$1.35||27.68|
Weight Watchers International has higher revenue and earnings than NutriSystem. Weight Watchers International is trading at a lower price-to-earnings ratio than NutriSystem, indicating that it is currently the more affordable of the two stocks.
NutriSystem beats Weight Watchers International on 9 of the 16 factors compared between the two stocks.
NutriSystem Company Profile
Nutrisystem, Inc. is a provider of weight management products and services, including nutritionally balanced weight loss programs, multi-day kits available at retail locations and digital tools to support weight loss. The Company’s program customers purchase monthly food packages containing four-week meal plan consisting supply of breakfasts, lunches, dinners and snacks and flex meal plan recipes, which they supplement with fresh fruits, vegetables and dairy. Its customers order on an auto-delivery basis (Auto-Delivery), where means it sends a four-week meal plan on an ongoing basis until notified of a customer’s cancellation. The Company offers its pre-selected favorites food pack or personalized plans, where customers can hand pick their entire menu or customize plans to their dietary preference. As of December 31, 2016, its meal plans featured over 150 menu options at different price points, including frozen and ready-to-go entrees, desserts, snacks and shakes.
Weight Watchers International Company Profile
Weight Watchers International, Inc. is a provider of weight management services. The Company operates globally through a network of Company-owned and franchise operations. The Company’s branded products and services include meetings conducted by its franchisees, digital weight management products provided through its Websites, mobile sites and applications, products sold at meetings, licensed products sold in retail channels and magazine subscriptions and other publications. It operates through four segments: North America, United Kingdom, Continental Europe (CE) and Other. It sells a range of products, including bars, snacks, cookbooks, food and restaurant guides with SmartPoints values, Weight Watchers magazines, SmartPoints calculators and fitness kits, and certain third-party products, such as activity-tracking monitors. It sells its products through its meetings business, online and to its franchisees. It includes a range of nutritional, activity, behavioral and lifestyle tools.
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