GNC (NYSE: GNC) and Krispy Kreme Doughnuts (NYSE:KKD) are both small-cap non-cyclical consumer goods & services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, risk, analyst recommendations, profitability, valuation and dividends.
This is a summary of recent recommendations and price targets for GNC and Krispy Kreme Doughnuts, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Krispy Kreme Doughnuts||0||0||0||0||N/A|
GNC currently has a consensus price target of $7.58, suggesting a potential upside of 62.04%. Given GNC’s higher possible upside, equities research analysts plainly believe GNC is more favorable than Krispy Kreme Doughnuts.
Volatility & Risk
GNC has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500. Comparatively, Krispy Kreme Doughnuts has a beta of 1.52, suggesting that its stock price is 52% more volatile than the S&P 500.
Institutional & Insider Ownership
61.9% of GNC shares are owned by institutional investors. 1.9% of GNC shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
GNC pays an annual dividend of $0.20 per share and has a dividend yield of 4.3%. Krispy Kreme Doughnuts does not pay a dividend. GNC pays out -3.7% of its earnings in the form of a dividend. GNC has raised its dividend for 4 consecutive years.
This table compares GNC and Krispy Kreme Doughnuts’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Krispy Kreme Doughnuts||6.90%||15.58%||11.41%|
Valuation & Earnings
This table compares GNC and Krispy Kreme Doughnuts’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|GNC||$2.54 billion||0.13||-$286.25 million||($5.46)||-0.86|
|Krispy Kreme Doughnuts||N/A||N/A||N/A||$0.47||44.68|
Krispy Kreme Doughnuts has lower revenue, but higher earnings than GNC. GNC is trading at a lower price-to-earnings ratio than Krispy Kreme Doughnuts, indicating that it is currently the more affordable of the two stocks.
GNC beats Krispy Kreme Doughnuts on 7 of the 12 factors compared between the two stocks.
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.
About Krispy Kreme Doughnuts
Krispy Kreme Doughnuts, Inc. is a retailer and wholesaler of doughnuts, complementary beverages, and treats and packaged sweets. The Company’s principal business includes owning and franchising Krispy Kreme stores, at which a range of doughnuts, including the Company’s Original Glazed doughnut, together with complementary products, including an array of coffees and other beverages. The Company operates through four business segments: Company Stores, Domestic Franchise, International Franchise and KK Supply Chain. The Company Stores segment includes the doughnut shops operated by the Company. The Domestic Franchise segment consists of the Company’s domestic store franchise operations and the licensing of Krispy Kreme products domestically. The International Franchise segment consists of the Company’s international store franchise operations. The KK Supply Chain segment produces doughnut mixes and manufactures doughnut-making equipment.
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