Head to Head Survey: GNC (GNC) & Sainsbury’s (JSAIY)

GNC (NYSE: GNC) and Sainsbury’s (OTCMKTS:JSAIY) are both retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their risk, dividends, valuation, institutional ownership, profitability, earnings and analyst recommendations.

Analyst Ratings

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This is a breakdown of recent ratings and recommmendations for GNC and Sainsbury’s, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GNC 3 3 0 0 1.50
Sainsbury’s 0 1 1 0 2.50

GNC currently has a consensus target price of $7.30, indicating a potential upside of 105.06%. Given GNC’s higher possible upside, equities research analysts plainly believe GNC is more favorable than Sainsbury’s.

Dividends

Sainsbury’s pays an annual dividend of $0.47 per share and has a dividend yield of 3.4%. GNC does not pay a dividend. Sainsbury’s pays out 43.9% of its earnings in the form of a dividend. GNC has raised its dividend for 5 consecutive years.

Institutional & Insider Ownership

59.7% of GNC shares are held by institutional investors. Comparatively, 0.3% of Sainsbury’s shares are held by institutional investors. 2.8% of GNC shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk & Volatility

GNC has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500. Comparatively, Sainsbury’s has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
GNC -6.07% -120.93% 4.91%
Sainsbury’s N/A N/A N/A

Earnings and Valuation

This table compares GNC and Sainsbury’s’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
GNC $2.45 billion 0.12 -$148.85 million $1.35 2.64
Sainsbury’s $34.30 billion 0.22 $492.85 million $1.07 12.93

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

Summary

Sainsbury’s beats GNC on 9 of the 16 factors compared between the two stocks.

GNC 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.

Sainsbury’s Company Profile

J Sainsbury plc, together with its subsidiaries, engages in the food, general merchandise and clothing retailing, and financial services activities in the United Kingdom. It operates through four segments: Retail ? Food; Retail ? General Merchandise & Clothing; Financial Services; and Property Investment. The company operates various store formats, including convenience stores and supermarkets, as well as offers organic produce under the Food to Go and FreeFrom names. It is also involved in an online grocery and general merchandise operations; and provides home, clothing, technology, leisure, toy, and electrical products, as well as groceries and loyalty programs, and energy solutions. As of March 11, 2017, the company operated 605 supermarkets and 809 convenience stores, as well as 59 Argos Digital stores, 11 Habitat stores, and 207 Digital Collection points. In addition, the company invests in and develops real estate properties; and offers financial services, such as loans portfolio comprising credit cards and storecards, personal loans, insurance, and travel money. J Sainsbury plc was founded in 1869 and is headquartered in London, the United Kingdom.

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