Comparing Weis Markets (WMK) & GNC Holdings (GNC)

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

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Weis Markets $3.40 billion 0.33 $173.90 million $3.05 13.73
GNC Holdings $2.48 billion 0.22 $278.86 million ($5.30) -1.50

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Weis Markets and GNC Holdings, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Weis Markets 0 0 0 0 N/A
GNC Holdings 5 2 0 0 1.29

GNC Holdings has a consensus target price of $8.08, indicating a potential upside of 1.93%. Given GNC Holdings’ higher probable upside, analysts clearly believe GNC Holdings is more favorable than Weis Markets.

Insider & Institutional Ownership

32.0% of Weis Markets shares are owned by institutional investors. Comparatively, 65.5% of GNC Holdings shares are owned by institutional investors. 26.9% of Weis Markets shares are owned by company insiders. Comparatively, 1.9% of GNC Holdings shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Weis Markets and GNC Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Weis Markets 2.42% 8.89% 5.94%
GNC Holdings -14.56% 285.93% 4.49%

Dividends

Weis Markets pays an annual dividend of $1.20 per share and has a dividend yield of 2.9%. GNC Holdings pays an annual dividend of $0.20 per share and has a dividend yield of 2.5%. Weis Markets pays out 39.3% of its earnings in the form of a dividend. GNC Holdings pays out -3.8% 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. Weis Markets has raised its dividend for 4 consecutive years. Weis Markets is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Weis Markets has a beta of 0.72, indicating that its share price is 28% less volatile than the S&P 500. Comparatively, GNC Holdings has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500.

Summary

Weis Markets beats GNC Holdings on 9 of the 15 factors compared between the two stocks.

Weis Markets Company Profile

Weis Markets, Inc. is engaged principally in the retail sale of food in Pennsylvania and surrounding states. The Company’s retail food stores sell groceries, dairy products, frozen foods, meats, seafood, fresh produce, floral, pharmacy services, deli products, prepared foods, bakery products, beer and wine, fuel and general merchandise items, such as health and beauty care and household products. As of December 31, 2016, it had owned and operated approximately 204 retail food stores. The majority of the Company’s stores are concentrated in central and northeast Pennsylvania, central Maryland, suburban Washington, District of Columbia and Baltimore regions and New York’s Southern Tier. As of December 31, 2016, it had operated four stores in Delaware, 50 stores in Maryland, five stores in New Jersey, nine stores in New York, 121 stores in Pennsylvania, 13 stores in Virginia and two stores in West Virginia, for a total of 204 retail food stores operating under the Weis Markets name.

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.

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