Estimates suggest Americans spend upward of $60 billion per year  on diets or weight-loss plans. Clearly the nutrition market is massive, so investors may be interested in considering some of the leading industry brands. However, large nutrition companies such as Herbalife (HLF 1.53%) and Nu Skin Enterprises (NUS 2.55%) are currently embroiled in controversies over their business models and face sweeping allegations of fraud.

Is this reason enough to declare guilt by association and stay away from other nutrition companies? Or is the market overreacting and opening up a hidden value opportunity? While I believe Herbalife and Nu Skin are volatile investments at best, there is one company in the nutrition space that investors should definitely consider for their portfolios. 

Proceed with caution
Herbalife and Nu Skin have both been at the center of large controversies regarding their business models. Herbalife in particular has become an epic clash of the activist titans, literally pitting billions of dollars on opposite sides of the story.

The most prominent Herbalife critic, Bill Ackman, has shorted $1 billion worth of shares and bellicosely derided the company as a pyramid scheme. The U.S. Department of Justice and the FBI recently opened an investigation into Herbalife,  and disturbing revelations about possibly lawbreaking at Nu Skin are coming to light. 

However, both Herbalife and Nu Skin have benefited from a surge in interest around the world for health and wellness products. According to the Los Angeles Times,  Herbalife "reported $4.8 billion of revenue and $527 million of net income in 2013, making it one of the largest and most profitable companies in the world."

Nu Skin has benefited from growing its China market share, a key region for growth in the global economy. Both companies rely on business models that do not sell products in stores but rather depend upon an extensive network of independent sales people.

With this information in mind, as well as Herbalife's and Nu Skin's jackknifing stock prices, I would be highly cautious of investing in both companies. If the allegations against them are true, both of the stocks are worth next to nothing. But if they are false, the companies will be vindicated. However, that is a significant coin-flip risk. And until more information surfaces, an investment in Herbalife or Nu Skin is dubious at best.

Is Blyth now a strong contender?
A company that's also trying to break into the nutrition sector is Blyth (NYSE: BTH). Blyth is somewhat of a jack-of-all-trades company, owning operations in candles, decorative accessories, seasonal decorations, and household-convenience items in addition to its weight-loss product segment. While this diversification may be appealing, Blyth has unfortunately proven to be a disappointment to investors so far.

Blyth has poured many resources into developing its ViSalus nutrition product line, but unfortunately it seems that the company is continuing to struggle to gain traction . In its most recent quarter, Blyth's revenue plunged 21% from the year-ago level; the ViSalus division suffered from a decreasing number of salespeople in the company's own multi-level marketing setup. With shares down almost 50% since last April, the market seems to be justly punishing a company that has yet to demonstrate consistent growth.

A nutrition company that's built to last
Herbalife, Nu Skin, and Blyth have each had their share of difficulties to wrangle with. But, there is a company in the nutrition sector investors should consider: General Nutritional Corporation (GNC +0.00%). As fellow fool Dan Caplinger notes :

[GNC] reported an 8.2% top-line gain in its latest fiscal year, thanks primarily to an expanding roster of stores around the globe...[GNC has] a growing "direct-selling" presence via its online operations, which continued to expand at a double-digit pace during the period. GNC also continued to benefit from its partnerships with general merchandise retailers such as drugstore giant Rite Aid, which have helped to expand GNC's brand at minimal cost and allowed it to post an adjusted operating margin that hit a five-year high in fiscal 2013.

GNC is an established player in its industry and appears to have a more sustainable dividend than its competitors. With over 6,000 stores in the United States, including 1,100 store-within-a-store in Rite Aid locations, GNC offers a more stable, proven business model in comparison to Herbalife, Nu Skin, and Blyth. Rite Aid is the nation's third largest pharmacy company after CVS and Walgreen's, thus giving GNC helpful exposure to customers.

The company has also successfully branched out into e-commerce,  allaying fears that GNC would not be able to adapt to the rise of online marketing. GNC offers a sustainable dividend in a quickly growing industry and overall is a solid investment in the nutrition sector.

So, when examining the nutrition sector, it appears that Herbalife, Nu Skin, and Blyth all need to "work out" several difficulties in their path. GNC Holdings, meanwhile, looks like a healthy, well-toned company poised to continue returning value to shareholders.