Reviewing Medifast (NYSE:MED) and Nature’s Sunshine Products (NASDAQ:NATR)

Medifast (NYSE:MED) and Nature’s Sunshine Products (NASDAQ:NATR) are both small-cap consumer staples companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, dividends, institutional ownership, risk and profitability.

Analyst Recommendations

This is a breakdown of recent ratings for Medifast and Nature’s Sunshine Products, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Medifast	1	2	0	0	1.67
Nature’s Sunshine Products	0	1	2	0	2.67

Medifast presently has a consensus target price of $12.00, indicating a potential upside of 3.71%. Nature’s Sunshine Products has a consensus target price of $30.50, indicating a potential upside of 109.48%. Given Nature’s Sunshine Products’ stronger consensus rating and higher possible upside, analysts clearly believe Nature’s Sunshine Products is more favorable than Medifast.

Insider & Institutional Ownership

95.5% of Medifast shares are owned by institutional investors. Comparatively, 79.4% of Nature’s Sunshine Products shares are owned by institutional investors. 3.7% of Medifast shares are owned by insiders. Comparatively, 3.1% of Nature’s Sunshine Products shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Medifast and Nature’s Sunshine Products’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Medifast	-8.08%	-6.69%	-5.25%
Nature’s Sunshine Products	3.68%	12.88%	8.17%

Risk and Volatility

Medifast has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500. Comparatively, Nature’s Sunshine Products has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500.

Earnings & Valuation

This table compares Medifast and Nature’s Sunshine Products”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Medifast	$385.79 million	0.34	-$18.67 million	($2.33)	-4.97
Nature’s Sunshine Products	$480.14 million	0.53	$19.52 million	$1.01	14.42

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

Summary

Nature’s Sunshine Products beats Medifast on 12 of the 14 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 Nature’s Sunshine Products

Nature’s Sunshine Products, Inc., a natural health and wellness company, manufactures and sells nutritional and personal care products in Asia, Europe, North America, Latin America, and internationally. It offers general health products related to blood sugar support, bone health, cellular health, cognitive function, joint health, mood, sexual health, sleep, sports and energy, and vision. The company also provides immunity, cardiovascular, and digestive products; and personal care products, such as oils and lotions, aloe vera gels, herbal shampoos, herbal skin treatment, toothpaste, and skin cleansers, as well as weight management products. It offers its products under the Nature’s Sunshine and Synergy WorldWide brands through a sales force of independent consultants. Nature’s Sunshine Products, Inc. was founded in 1972 and is headquartered in Lehi, Utah.