Graham (NYSE: GHC) and Weight Watchers International (NYSE:WTW) are both mid-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, institutional ownership, profitability and risk.
Earnings and Valuation
This table compares Graham and Weight Watchers International’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Graham||$2.48 billion||1.27||$168.59 million||$22.20||25.70|
|Weight Watchers International||$1.16 billion||2.53||$67.69 million||$1.68||27.21|
Risk and Volatility
Graham has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500. Comparatively, Weight Watchers International has a beta of 2.96, suggesting that its share price is 196% more volatile than the S&P 500.
This table compares Graham and Weight Watchers International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Weight Watchers International||9.03%||-8.81%||7.94%|
Graham pays an annual dividend of $5.08 per share and has a dividend yield of 0.9%. Weight Watchers International does not pay a dividend. Graham pays out 22.9% of its earnings in the form of a dividend.
This is a summary of current ratings and recommmendations for Graham and Weight Watchers International, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Weight Watchers International||1||1||1||0||2.00|
Weight Watchers International has a consensus price target of $38.67, suggesting a potential downside of 15.43%. Given Weight Watchers International’s higher possible upside, analysts plainly believe Weight Watchers International is more favorable than Graham.
Institutional and Insider Ownership
69.0% of Graham shares are held by institutional investors. Comparatively, 86.5% of Weight Watchers International shares are held by institutional investors. 22.5% of Graham shares are held by insiders. Comparatively, 15.8% of Weight Watchers International shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Weight Watchers International beats Graham on 9 of the 15 factors compared between the two stocks.
Graham Company Profile
Graham Holdings Company, formerly The Washington Post Company, is a diversified education and media company whose principal operations include educational services, television broadcasting, cable television systems, and online, print and local TV news. The Company owns Kaplan, a provider of educational services to individuals, schools and businesses, serving over one million students annually with operations in more than 30 countries. Its programs include higher education, test preparation, language instruction and professional training. Its Post-Newsweek Stations, Inc owns six television stations which include WDIV-Detroit (NBC), KPRC-Houston (NBC),WPLG-Miami (ABC), WKMG-Orlando (CBS), KSAT-San Antonio (ABC) and WJXT-Jacksonville (independent). The stations also broadcast digital channels focusing on classic television and lifestyle programming, in addition to operating mobile sites and mobile applications delivering breaking news, weather and community news.
Weight Watchers International Company Profile
Weight Watchers International, Inc. is a provider of weight management services. The Company operates globally through a network of Company-owned and franchise operations. The Company’s branded products and services include meetings conducted by its franchisees, digital weight management products provided through its Websites, mobile sites and applications, products sold at meetings, licensed products sold in retail channels and magazine subscriptions and other publications. It operates through four segments: North America, United Kingdom, Continental Europe (CE) and Other. It sells a range of products, including bars, snacks, cookbooks, food and restaurant guides with SmartPoints values, Weight Watchers magazines, SmartPoints calculators and fitness kits, and certain third-party products, such as activity-tracking monitors. It sells its products through its meetings business, online and to its franchisees. It includes a range of nutritional, activity, behavioral and lifestyle tools.
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