Contrasting Overstock.com (OSTK) and NutriSystem (NTRI)

Overstock.com (NASDAQ: OSTK) and NutriSystem (NASDAQ:NTRI) are both small-cap retail/wholesale companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, earnings, institutional ownership, analyst recommendations and dividends.

Insider & Institutional Ownership

59.1% of Overstock.com shares are held by institutional investors. 24.2% of Overstock.com shares are held by company insiders. Comparatively, 2.0% of NutriSystem shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

NutriSystem pays an annual dividend of $1.00 per share and has a dividend yield of 2.6%. Overstock.com does not pay a dividend. NutriSystem pays out 51.0% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Overstock.com and NutriSystem, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Overstock.com 0 0 1 0 3.00
NutriSystem 0 2 5 0 2.71

Overstock.com presently has a consensus price target of $100.00, indicating a potential upside of 227.33%. NutriSystem has a consensus price target of $50.50, indicating a potential upside of 33.77%. Given Overstock.com’s stronger consensus rating and higher possible upside, analysts clearly believe Overstock.com is more favorable than NutriSystem.

Earnings & Valuation

This table compares Overstock.com and NutriSystem’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Overstock.com $1.74 billion 0.51 -$109.87 million ($1.81) -16.88
NutriSystem $696.96 million 1.61 $57.87 million $1.96 19.26

NutriSystem has lower revenue, but higher earnings than Overstock.com. Overstock.com is trading at a lower price-to-earnings ratio than NutriSystem, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Overstock.com and NutriSystem’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Overstock.com -8.81% -69.29% -29.31%
NutriSystem 7.65% 42.69% 27.98%

Risk & Volatility

Overstock.com has a beta of 1.65, meaning that its stock price is 65% more volatile than the S&P 500. Comparatively, NutriSystem has a beta of 1.17, meaning that its stock price is 17% more volatile than the S&P 500.

Summary

NutriSystem beats Overstock.com on 9 of the 16 factors compared between the two stocks.

About Overstock.com

Overstock.com, Inc. operates as an online retailer in the United States. It operates in two segments, Direct and Partner. The company offers home and garden products, including furniture, home decor, garden and patio, kitchen and dining, bedding, home improvement, housewares, and other related products; jewelry and watches; clothing and accessories; electronics and computers; and other products. It also provides handcrafted products; new, used, and certified pre-owned cars; and loans, credit cards, and insurance, as well as access links to automated financial advisory and discounted stock brokerage services. The company sells its products and services through its Internet Websites located at overstock.com, o.co, and o.biz, as well as through third party logistics providers to international customers. The company was formerly known as D2-Discounts Direct and changed its name to Overstock.com, Inc. in October 1999. Overstock.com, Inc. was founded in 1997 and is headquartered in Midvale, Utah.

About NutriSystem

Nutrisystem, Inc., together with its subsidiaries, provides weight management products and services for women and men in the United States. The company offers weight loss programs that consist primarily of a pre-packaged food program, digital tools, and counseling. It also provides Nutrisystem Lean13 program, which provides weight loss, and support and counseling services; the South Beach Diet, a weight-loss program; and Nutrisystem 5-day kit, a ?D' kit that offers individuals with or at risk of type 2 diabetes. In addition, the company provides SmartCarb and PowerFuel products, including meal replacement bars, powder shakes, baked goods and snacks; and Nutrisystem D Program, a weight loss program designed to produce gradual weight loss. It sells its pre-packaged foods to weight loss program participants directly through the Internet and telephone; a television shopping network; and retailers. Nutrisystem, Inc. was founded in 1972 and is headquartered in Fort Washington, Pennsylvania.

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