Why GNC Holdings Is Poised to Keep Rising
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 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.
Pittsburgh, Pa. (1935)
Chairman/CEO Joseph Fortunato
CFO Michael Nuzzo
Trailing-12-Month Return on Equity
$176.2 million/$1.1 billion
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.
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 ] 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.
If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, GNC may not be your top choice.
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The article Why GNC Holdings Is Poised to Keep Rising originally appeared on Fool.com.Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Amazon.com. The Motley Fool owns shares of Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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