Comparing NutriSystem (NTRI) & The Providence Service Corporation (PRSC)

NutriSystem (NASDAQ: NTRI) and The Providence Service Corporation (NASDAQ:PRSC) are both small-cap consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, valuation, profitability, dividends, risk and institutional ownership.

Insider and Institutional Ownership

97.2% of NutriSystem shares are held by institutional investors. Comparatively, 93.1% of The Providence Service Corporation shares are held by institutional investors. 2.4% of NutriSystem shares are held by insiders. Comparatively, 18.9% of The Providence Service Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares NutriSystem and The Providence Service Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
NutriSystem $641.09 million 2.55 $86.26 million $1.61 34.10
The Providence Service Corporation $1.61 billion 0.43 $68.15 million $4.65 11.02

NutriSystem has higher revenue, but lower earnings than The Providence Service Corporation. The Providence Service Corporation is trading at a lower price-to-earnings ratio than NutriSystem, indicating that it is currently the more affordable of the two stocks.

Dividends

NutriSystem pays an annual dividend of $0.70 per share and has a dividend yield of 1.3%. The Providence Service Corporation does not pay a dividend. NutriSystem pays out 43.5% of its earnings in the form of a dividend.

Volatility & Risk

NutriSystem has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500. Comparatively, The Providence Service Corporation has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for NutriSystem and The Providence Service Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NutriSystem 0 2 7 0 2.78
The Providence Service Corporation 0 1 1 0 2.50

NutriSystem presently has a consensus target price of $65.00, indicating a potential upside of 18.40%. The Providence Service Corporation has a consensus target price of $60.00, indicating a potential upside of 17.12%. Given NutriSystem’s stronger consensus rating and higher possible upside, research analysts clearly believe NutriSystem is more favorable than The Providence Service Corporation.

Profitability

This table compares NutriSystem and The Providence Service Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NutriSystem 7.60% 48.41% 29.18%
The Providence Service Corporation 4.11% 6.94% 2.46%

Summary

NutriSystem beats The Providence Service Corporation on 12 of the 16 factors compared between the two stocks.

About NutriSystem

Nutrisystem, Inc. is a provider of weight management products and services, including nutritionally balanced weight loss programs, multi-day kits available at retail locations and digital tools to support weight loss. The Company’s program customers purchase monthly food packages containing four-week meal plan consisting supply of breakfasts, lunches, dinners and snacks and flex meal plan recipes, which they supplement with fresh fruits, vegetables and dairy. Its customers order on an auto-delivery basis (Auto-Delivery), where means it sends a four-week meal plan on an ongoing basis until notified of a customer’s cancellation. The Company offers its pre-selected favorites food pack or personalized plans, where customers can hand pick their entire menu or customize plans to their dietary preference. As of December 31, 2016, its meal plans featured over 150 menu options at different price points, including frozen and ready-to-go entrees, desserts, snacks and shakes.

About The Providence Service Corporation

The Providence Service Corporation (Providence) is a holding company. The Company, through its subsidiaries, is engaged in the provision of healthcare and workforce development services for public and private sector entities. The Company’s segments include Non-Emergency Transportation Services (NET Services), Workforce Development Services (WD Services) and Matrix Investment. NET Services segment includes nationwide provider of non-emergency medical transportation programs for state governments and managed care organizations. WD Services segment is a global provider of employment preparation and placement and legal offender rehabilitation services to eligible participants of government sponsored programs. Matrix Investment segment includes minority interest in nationwide provider of in-home care optimization and management solutions, including comprehensive health assessments (CHAs), to members of managed care organizations, accounted for as an equity method investment.

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