Comparing Medifast (NYSE:MED) & Lifevantage (NASDAQ:LFVN)

Medifast (NYSE:MED) and Lifevantage (NASDAQ:LFVN) are both small-cap consumer staples companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, risk and institutional ownership.

Volatility and Risk

Medifast has a beta of 0.71, indicating that its stock price is 29% less volatile than the S&P 500. Comparatively, Lifevantage has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500.

Profitability

This table compares Medifast and Lifevantage’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Medifast	-8.08%	-6.69%	-5.25%
Lifevantage	2.78%	21.56%	11.62%

Valuation and Earnings

This table compares Medifast and Lifevantage”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Medifast	$385.79 million	0.37	-$18.67 million	($2.33)	-5.42
Lifevantage	$182.59 million	0.43	$5.07 million	$0.40	15.62

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

Insider and Institutional Ownership

95.5% of Medifast shares are held by institutional investors. Comparatively, 35.3% of Lifevantage shares are held by institutional investors. 3.7% of Medifast shares are held by company insiders. Comparatively, 22.0% of Lifevantage shares are held 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.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Medifast and Lifevantage, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Medifast	1	2	0	0	1.67
Lifevantage	0	2	0	0	2.00

Medifast currently has a consensus target price of $12.00, indicating a potential downside of 4.95%. Lifevantage has a consensus target price of $5.50, indicating a potential downside of 12.00%. Given Medifast’s higher possible upside, research analysts clearly believe Medifast is more favorable than Lifevantage.

Summary

Lifevantage beats Medifast on 10 of the 13 factors compared between the two stocks.

About Medifast

Medifast, Inc., through its subsidiaries, engages in the manufacture and sale of weight loss, weight management, and healthy living products in the United States and the Asia-Pacific. It offers bars, puffs, cereal, crunchers, drinks, hearty choices, oatmeal, pancakes, pudding, soft serve, shakes, smoothies, soft bakes, and soups under the OPTAVIA, OPTAVIA ACTIVE, and Optimal Health brand names. The company markets its products through point-of-sale transactions, as well as through ecommerce platform. Medifast, Inc. was founded in 1980 and is headquartered in Baltimore, Maryland.

About Lifevantage

LifeVantage Corporation engages in the identification, research, development, formulation, and sale of advanced nutrigenomic activators, dietary supplements, nootropics, pre- and pro-biotics, weight management, skin and hair care, bath and body, and targeted relief products. It offers Protandim, a dietary supplement; LifeVantage Omega+, a dietary supplement that combines DHA and EPA Omega-3 fatty acids, Omega-7 fatty acids, and vitamin D3; LifeVantage ProBio, a dietary supplement to support gut health; PhysIQ, a weight management system; LifeVantage IC Bright, a supplement to support eye and brain health, reduce eye fatigue and strain, supports cognitive functions, and support normal sleep patterns; Petandim for Dogs, a supplement to combat oxidative stress in dogs; and Axio, a nootropic energy drink mix. The company also provides anti-aging skin care products, including liquid collagen, facial cleansers, perfecting lotions, eye serums, anti-aging creams, hand creams, beauty serum, as well as hair care products, such as invigorating shampoos, nourishing conditioners, and scalp serums under the LifeVantage TrueScience brand name. In addition, it offers bath and body, and targeted relief products, such as body lotion, body wash, body butter, deodorant, soothing balm, and body rub under the TrueScience brand name. It sells its products through its website and network of independent distributors in the United States, Mexico, Japan, Australia, Hong Kong, Canada, Thailand, the United Kingdom, the Netherlands, Germany, Taiwan, Austria, Spain, Ireland, Belgium, New Zealand, Singapore, and the Philippines. The company was founded in 2003 and is headquartered in Lehi, Utah.