Critical Survey: Herbal Center (HLF) and PetIQ (PETQ)

Herbal Center (NYSE: HLF) and PetIQ (NASDAQ:PETQ) are both retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, valuation, profitability, analyst recommendations, earnings, institutional ownership and dividends.

Earnings and Valuation

This table compares Herbal Center and PetIQ’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Herbal Center $4.43 billion 2.22 $213.90 million $4.86 22.95
PetIQ $266.69 million 1.70 -$3.49 million $0.39 49.69



Herbal Center has higher revenue and earnings than PetIQ. Herbal Center is trading at a lower price-to-earnings ratio than PetIQ, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Herbal Center and PetIQ, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Herbal Center 0 1 4 0 2.80
PetIQ 0 0 6 0 3.00

Herbal Center currently has a consensus price target of $113.25, suggesting a potential upside of 1.54%. PetIQ has a consensus price target of $28.20, suggesting a potential upside of 45.51%. Given PetIQ’s stronger consensus rating and higher probable upside, analysts clearly believe PetIQ is more favorable than Herbal Center.

Institutional and Insider Ownership

98.9% of Herbal Center shares are owned by institutional investors. Comparatively, 39.4% of PetIQ shares are owned by institutional investors. 6.2% of Herbal Center shares are owned by insiders. Comparatively, 45.3% of PetIQ shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Herbal Center and PetIQ’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Herbal Center 4.68% -1,193.47% 12.66%
PetIQ N/A N/A N/A

Summary

Herbal Center beats PetIQ on 7 of the 12 factors compared between the two stocks.

About Herbal Center

Herbalife Ltd. develops and sells nutrition solutions in North America, Mexico, South and Central America, Europe, the Middle East, Africa, and the Asia Pacific. It provides science-based products in the areas of weight management; targeted nutrition; energy, sports, and fitness; and outer nutrition. The company offers weight management products, including meal replacement products, protein shakes, drink mixes, weight loss enhancers, and healthy snacks; targeted nutrition products comprising dietary and nutritional supplements that contain herbs, vitamins, minerals, and other natural ingredients; outer nutrition products consisting of facial skin, body, and hair care products; and energy, sports, and fitness products, such as N-R-G tea and energy drink products. It also provides literature, promotional, and other materials, including start-up kits, sales tools, and educational materials. The company offers its products through own retail stores, as well as through independent service providers, sales representatives, and sales officers. Herbalife Ltd. was founded in 1980 and is headquartered in Los Angeles, California.

About PetIQ

PetIQ, Inc. develops, manufactures, and distributes pet medications, and health and wellness products for dogs and cats in the United States, Canada, and Europe. It offers pet prescription medications, including products for arthritis, thyroid, and diabetes and pain treatments, as well as heartworm preventatives, antibiotics, and other specialty medications; over-the-counter medications and supplies, such as flea and tick control products in various forms comprising spot on treatments, chewables, and collars; and health and wellness products consisting of specialty treats and other pet products, which include dental treats and nutritional supplements. The company provides its products primarily under the VetIQ, PetAction Plus, Advecta, PetLock Plus, and TruProfen brands. It sells its products through distributors as well as through retail stores, including approximately 40,000 retail pharmacy locations. PetIQ, Inc. was founded in 2010 and is headquartered in Eagle, Idaho.

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