Lifevantage (NASDAQ:LFVN) and Medifast (NYSE:MED) Critical Contrast

Lifevantage (NASDAQ:LFVN) and Medifast (NYSE:MED) are both small-cap consumer staples companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, profitability, institutional ownership, valuation and earnings.

Insider & Institutional Ownership

35.3% of Lifevantage shares are owned by institutional investors. Comparatively, 95.5% of Medifast shares are owned by institutional investors. 22.0% of Lifevantage shares are owned by insiders. Comparatively, 3.7% of Medifast shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and target prices for Lifevantage and Medifast, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lifevantage	0	2	0	0	2.00
Medifast	1	2	0	0	1.67

Lifevantage presently has a consensus target price of $5.50, indicating a potential downside of 13.52%. Medifast has a consensus target price of $12.00, indicating a potential downside of 1.40%. Given Medifast’s higher possible upside, analysts clearly believe Medifast is more favorable than Lifevantage.

Volatility and Risk

Lifevantage has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500. Comparatively, Medifast has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500.

Profitability

This table compares Lifevantage and Medifast’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lifevantage	2.78%	21.63%	11.64%
Medifast	-8.08%	-6.69%	-5.25%

Earnings & Valuation

This table compares Lifevantage and Medifast”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lifevantage	$182.59 million	0.44	$9.81 million	$0.40	15.90
Medifast	$385.79 million	0.35	-$18.67 million	($2.33)	-5.22

Lifevantage has higher earnings, but lower revenue than Medifast. Medifast is trading at a lower price-to-earnings ratio than Lifevantage, indicating that it is currently the more affordable of the two stocks.

Summary

Lifevantage beats Medifast on 10 of the 13 factors compared between the two stocks.

About Lifevantage

LifeVantage Corporation engages in the identification, research, development, formulation, and sale of advanced nutrigenomic activators, dietary supplements, nootropics, pre- and pro-biotics, weight management, skin and hair care, bath and body, and targeted relief products. It offers Protandim, a dietary supplement; LifeVantage Omega+, a dietary supplement that combines DHA and EPA Omega-3 fatty acids, Omega-7 fatty acids, and vitamin D3; LifeVantage ProBio, a dietary supplement to support gut health; PhysIQ, a weight management system; LifeVantage IC Bright, a supplement to support eye and brain health, reduce eye fatigue and strain, supports cognitive functions, and support normal sleep patterns; Petandim for Dogs, a supplement to combat oxidative stress in dogs; and Axio, a nootropic energy drink mix. The company also provides anti-aging skin care products, including liquid collagen, facial cleansers, perfecting lotions, eye serums, anti-aging creams, hand creams, beauty serum, as well as hair care products, such as invigorating shampoos, nourishing conditioners, and scalp serums under the LifeVantage TrueScience brand name. In addition, it offers bath and body, and targeted relief products, such as body lotion, body wash, body butter, deodorant, soothing balm, and body rub under the TrueScience brand name. It sells its products through its website and network of independent distributors in the United States, Mexico, Japan, Australia, Hong Kong, Canada, Thailand, the United Kingdom, the Netherlands, Germany, Taiwan, Austria, Spain, Ireland, Belgium, New Zealand, Singapore, and the Philippines. The company was founded in 2003 and is headquartered in Lehi, Utah.

About Medifast

Medifast, Inc., through its subsidiaries, engages in the manufacture and sale of weight loss, weight management, and healthy living products in the United States and the Asia-Pacific. It offers bars, puffs, cereal, crunchers, drinks, hearty choices, oatmeal, pancakes, pudding, soft serve, shakes, smoothies, soft bakes, and soups under the OPTAVIA, OPTAVIA ACTIVE, and Optimal Health brand names. The company markets its products through point-of-sale transactions, as well as through ecommerce platform. Medifast, Inc. was founded in 1980 and is headquartered in Baltimore, Maryland.