Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, health and wellness products retailer GNC Holdings (GNC +0.00%) has earned a respected four-star ranking.
With that in mind, let's take a closer look at GNC and see what CAPS investors are saying about the stock right now.
GNC facts
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Headquarters (founded) |
Pittsburgh, Pa. (1935) |
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Market Cap |
$4.6 billion |
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Industry |
Specialty stores |
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Trailing-12-Month Revenue |
$2.5 billion |
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Management |
Chairman/CEO Joseph Fortunato CFO Michael Nuzzo |
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Trailing-12-Month Return on Equity |
25.6% |
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Cash/Debt |
$176.2 million/$1.1 billion |
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Dividend Yield |
1.3% |
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Competitors |
Amazon.com CVS Caremark Walgreen |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 89% of the 123 members who have rated GNC believe the stock will outperform the S&P 500 going forward.
Earlier this month, one of those bulls, fellow Fool Thomas Engle (TMF1000), succinctly summed up the outperform case for our community:
Sales growth this last quarter was up only about 6%, but net income per share was up 21%. They pay a $0.60 dividend which gives them a dividend yield of 1.4%. Their cash flow yield is 4.6%, so they could easily raise their dividend. They are by far the leader in a very fragmented industry. I believe both [Vitamin Shoppe (VSI +0.00%)] and GNC will do well and I think they may make a fair pairing in a portfolio. Stability versus growth.
They do have $1.1 billion in debt. But they generate about $200 million in cash flow a year and they have $174 million in cash, so that shouldn't be a problem. Their cash flow is very high, so in my opinion, is reason enough to believe they will beat the S&P 500 over the next ten years.
