Herbalife LTD. (NYSE: HLF) and Matthews International Corporation (NASDAQ:MATW) are both mid-cap retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, earnings, dividends, profitability, valuation and risk.

Valuation & Earnings

This table compares Herbalife LTD. and Matthews International Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Herbalife LTD. $4.42 billion 1.40 $727.70 million $4.76 13.84
Matthews International Corporation $1.50 billion 1.35 $190.96 million $2.39 26.38

Herbalife LTD. has higher revenue and earnings than Matthews International Corporation. Herbalife LTD. is trading at a lower price-to-earnings ratio than Matthews International Corporation, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Herbalife LTD. and Matthews International Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Herbalife LTD. 9.28% 216.82% 14.15%
Matthews International Corporation 5.17% 16.23% 5.40%

Risk and Volatility

Herbalife LTD. has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500. Comparatively, Matthews International Corporation has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500.

Dividends

Matthews International Corporation pays an annual dividend of $0.68 per share and has a dividend yield of 1.1%. Herbalife LTD. does not pay a dividend. Matthews International Corporation pays out 28.5% of its earnings in the form of a dividend. Herbalife LTD. has increased its dividend for 5 consecutive years.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Herbalife LTD. and Matthews International Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Herbalife LTD. 0 2 2 0 2.50
Matthews International Corporation 0 0 3 0 3.00

Herbalife LTD. currently has a consensus target price of $86.33, indicating a potential upside of 31.05%. Matthews International Corporation has a consensus target price of $83.50, indicating a potential upside of 32.43%. Given Matthews International Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe Matthews International Corporation is more favorable than Herbalife LTD..

Insider and Institutional Ownership

79.1% of Matthews International Corporation shares are held by institutional investors. 5.0% of Herbalife LTD. shares are held by insiders. Comparatively, 3.9% of Matthews International Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Herbalife LTD. beats Matthews International Corporation on 11 of the 17 factors compared between the two stocks.

Herbalife LTD. Company Profile

Herbalife Ltd. is a global nutrition company. The Company develops and sells weight management, healthy meals and snacks, sports and fitness, energy and targeted nutritional products, as well as personal care products. Its operating segments are based on geographical operations in six regions: North America; Mexico; South and Central America; Europe, the Middle East, and Africa (EMEA); Asia Pacific, and China. The Company categorizes its products into five groups: weight management, targeted nutrition, energy, sports and fitness, outer nutrition, and literature, promotional and other. As of December 31, 2016, it marketed and sold approximately 140 products encompassing over 4,700 stock keeping units (SKUs) globally. Its product categories include meal replacement; protein shakes; drink mixes; dietary and nutritional supplements containing herbs, vitamins, minerals and other natural ingredients; facial skin care; body care; hair care products; sales tools, and educational materials.

Matthews International Corporation Company Profile

Matthews International Corporation is a provider of brand solutions, memorialization products and industrial technologies. The Company operates through three segments: SGK Brand Solutions, Memorialization and Industrial Technologies. The SGK Brand Solutions segment provides brand development, deployment and delivery (consisting of brand management, printing plates and cylinders, pre-media services and imaging services for consumer packaged goods and retail customers, merchandising display systems, and marketing and design services). The Memorialization segment manufactures and markets a line of memorialization products used primarily in cemeteries, funeral homes and crematories. The Industrial Technologies segment designs, manufactures and distributes a range of marking, coding and industrial automation solutions, order fulfillment systems and related consumables.

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