Sainsbury’s (JSAIY) & GNC (GNC) Financial Review

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

Insider & Institutional Ownership

0.3% of Sainsbury’s shares are held by institutional investors. Comparatively, 59.3% of GNC shares are held by institutional investors. 2.8% of GNC shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Sainsbury’s pays an annual dividend of $0.47 per share and has a dividend yield of 2.9%. GNC does not pay a dividend. Sainsbury’s pays out 43.5% of its earnings in the form of a dividend. GNC has increased its dividend for 5 consecutive years.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sainsbury’s $37.73 billion 0.23 $409.74 million $1.08 14.92
GNC $2.45 billion 0.11 -$148.85 million $1.35 2.50

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.

Volatility and Risk

Sainsbury’s has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500. Comparatively, GNC has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Sainsbury’s and GNC, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sainsbury’s 0 2 2 0 2.50
GNC 3 2 0 0 1.40

GNC has a consensus target price of $6.25, suggesting a potential upside of 85.46%. Given GNC’s higher possible upside, analysts clearly believe GNC is more favorable than Sainsbury’s.

Profitability

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

Net Margins Return on Equity Return on Assets
Sainsbury’s N/A N/A N/A
GNC -6.89% -84.23% 5.00%

Summary

Sainsbury’s beats GNC on 10 of the 17 factors compared between the two stocks.

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.

GNC Company Profile

GNC Holdings, Inc., together with its subsidiaries, operates as a specialty retailer of health, wellness, and performance products. It operates through three segments: U.S. and Canada, International, and Manufacturing/Wholesale. Its products 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 also provides third-party contract manufacturing services. It sells its products under the GNC proprietary brands, as well as under third-party brands. The company operates a network of approximately 9,000 locations under the GNC brand worldwide. It sells its products through company-owned retail stores and its Website GNC.com, as well as third-party Websites; and domestic and international franchise activities. GNC Holdings, Inc. has a strategic partnership and China joint venture agreement with Harbin Pharmaceutical Group Holding Co., Ltd. The company was founded in 1935 and is headquartered in Pittsburgh, Pennsylvania.

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