NutriSystem (NASDAQ: NTRI) and Graham (NYSE:GHC) are both non-cyclical consumer goods & services companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitability and analyst recommendations.
Risk & Volatility
NutriSystem has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500. Comparatively, Graham has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500.
This table compares NutriSystem and Graham’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|NutriSystem||$545.45 million||2.71||$35.46 million||$1.85||26.62|
|Graham||$2.48 billion||1.27||$168.59 million||$22.20||25.74|
Graham has higher revenue and earnings than NutriSystem. Graham is trading at a lower price-to-earnings ratio than NutriSystem, indicating that it is currently the more affordable of the two stocks.
This table compares NutriSystem and Graham’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of recent ratings for NutriSystem and Graham, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
NutriSystem presently has a consensus target price of $68.63, indicating a potential upside of 39.34%. Given NutriSystem’s higher possible upside, research analysts plainly believe NutriSystem is more favorable than Graham.
NutriSystem pays an annual dividend of $0.70 per share and has a dividend yield of 1.4%. Graham pays an annual dividend of $5.08 per share and has a dividend yield of 0.9%. NutriSystem pays out 37.8% of its earnings in the form of a dividend. Graham pays out 22.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
Insider and Institutional Ownership
92.5% of NutriSystem shares are held by institutional investors. Comparatively, 69.0% of Graham shares are held by institutional investors. 2.4% of NutriSystem shares are held by company insiders. Comparatively, 22.5% of Graham shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
NutriSystem beats Graham on 10 of the 15 factors compared between the two stocks.
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.
Graham Holdings Company, formerly The Washington Post Company, is a diversified education and media company whose principal operations include educational services, television broadcasting, cable television systems, and online, print and local TV news. The Company owns Kaplan, a provider of educational services to individuals, schools and businesses, serving over one million students annually with operations in more than 30 countries. Its programs include higher education, test preparation, language instruction and professional training. Its Post-Newsweek Stations, Inc owns six television stations which include WDIV-Detroit (NBC), KPRC-Houston (NBC),WPLG-Miami (ABC), WKMG-Orlando (CBS), KSAT-San Antonio (ABC) and WJXT-Jacksonville (independent). The stations also broadcast digital channels focusing on classic television and lifestyle programming, in addition to operating mobile sites and mobile applications delivering breaking news, weather and community news.
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