GNC Holdings (NYSE: GNC) and Supervalu (NYSE:SVU) are both small-cap retail/wholesale companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, dividends, analyst recommendations, risk and valuation.

Analyst Ratings

This is a summary of recent ratings and target prices for GNC Holdings and Supervalu, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GNC Holdings 5 2 0 0 1.29
Supervalu 0 4 2 0 2.33

GNC Holdings currently has a consensus price target of $8.08, indicating a potential downside of 7.93%. Supervalu has a consensus price target of $33.60, indicating a potential upside of 54.84%. Given Supervalu’s stronger consensus rating and higher possible upside, analysts clearly believe Supervalu is more favorable than GNC Holdings.

Institutional & Insider Ownership

65.5% of GNC Holdings shares are owned by institutional investors. 1.9% of GNC Holdings shares are owned by insiders. Comparatively, 1.7% of Supervalu shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk and Volatility

GNC Holdings has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500. Comparatively, Supervalu has a beta of 2.13, meaning that its share price is 113% more volatile than the S&P 500.

Valuation and Earnings

This table compares GNC Holdings and Supervalu’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
GNC Holdings $2.48 billion 0.24 $278.86 million ($5.30) -1.66
Supervalu $12.72 billion 0.07 $461.00 million $16.03 1.35

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

Dividends

GNC Holdings pays an annual dividend of $0.20 per share and has a dividend yield of 2.3%. Supervalu does not pay a dividend. GNC Holdings pays out -3.8% of its earnings in the form of a dividend. Supervalu has raised its dividend for 4 consecutive years.

Profitability

This table compares GNC Holdings and Supervalu’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
GNC Holdings -14.56% 285.93% 4.49%
Supervalu 0.30% 9.36% 1.09%

Summary

Supervalu beats GNC Holdings on 9 of the 16 factors compared between the two stocks.

GNC Holdings Company Profile

GNC Holdings, Inc. is a specialty retailer of health, wellness and performance products, which include protein, performance supplements, weight management supplements, vitamins, herbs and greens, wellness supplements, health and beauty, food and drink and other general merchandise. The Company’s operations consist of purchasing raw materials, formulating and manufacturing products and selling the finished products. It operates in three segments: U.S. and Canada, International and Manufacturing/Wholesale. Its U.S. and Canada segment generates revenues primarily from sales of products to customers at its Company-owned stores in the United States, Canada and Puerto Rico, through its Websites, GNC.com and LuckyVitamin.com. Its International segment generates revenue primarily to its international franchisees. Its Manufacturing/Wholesale segment comprises its manufacturing operations in South Carolina and its wholesale partner relationships.

Supervalu Company Profile

Supervalu Inc. is a wholesale distributor to independent retail customers across the United States. The Company’s segments include Wholesale and Retail. The Company offers a range of advertised brand name and private-label products, including grocery (both perishable and nonperishable), general merchandise and home, health and beauty care, and pharmacy, which are sold through Company-operated and licensed Retail stores to shoppers and through its Wholesale segment to independent retail customers. The Company’s Wholesale segment provides wholesale distribution of products to independent retail customers. Wholesale is organized and operated through two geographic regions: East and West. As of February 27, 2016, the Company conducted its Retail operations through a total of 200 stores primarily organized under five regionally-based retail banners of Cub Foods, Shoppers Food & Pharmacy, Shop ‘n Save, Farm Fresh and Hornbacher’s, as well as two Rainbow and two County Market stores.

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