The COVID-19 crisis has increased healthcare awareness among individuals significantly, in-part as a response to the physical inactivity caused by remote lifestyles and mandated shelter in place regimes.
With the number of health-conscious people on the rise--with many now reconsidering what they eat and adopting more healthy dietary regimens--the demand for nutritional products is increasing. Because the remote lifestyle is expected to continue even in the post-pandemic world, companies offering nutritional foods are expected to continue thriving.
Nutrition stocks Herbalife Nutrition Ltd. (HLF) and Nu Skin Enterprises, Inc. (NUS) have witnessed higher sales volume in their last reported quarter. Their sales growth has been driven primarily by the products they introduced over the past year. Because the nutrition industry is poised to grow significantly in the coming months, we think these stocks will hit new highs soon.
Herbalife Nutrition Ltd. (HLF)
Founded in 1980, HLF is a global nutrition company. The company operates through six geographical segments — North America, Mexico, South and Central America, Europe, the Middle East, and Africa (EMEA), Asia Pacific and China. HLF’s products are categorized into five groups — weight management, targeted nutrition, energy, sports and fitness, outer nutrition and literature, promotional, and other.
On March 1, HLF appointed three new independent members to its Board of Directors — Sophie L’Helias, Kevin M. Jones and Don Mulligan. The company launched an immersive ARIA 360 AR fan experience in late January in partnership with LA Galaxy. And on January 14 it announced that its innovation and manufacturing facilities in Winston-Salem, North Carolina and Lake Forest, California had earned the ISO 45001 Occupational Health and Safety Standard from NSF-ISR. Also, in January, the company launched its Protein Baked Goods Mix.
HLF’s net sales have increased 15.6% year-over-year to $1.41 billion for the fourth quarter, ended December 31, 2020, representing the largest fourth quarter net sales result in the company’s history. Its revenue from the North America segment increased nearly 33% year-over-year to $310.50 million. Its gross profit increased 11.2% year-over-year to $1.10 billion. And its net income came in at $73.8 million, up 30.2% year-over-year.
A consensus EPS estimate of $1.29 for the quarter ending June 30, 2021 represents an improvement of 35.8% year-over-year. Moreover, HLF has surpassed the consensus EPS estimates in three of the trailing four quarters. A consensus estimate of $1.50 billion for the quarter represents a 15.5% rise on a year-over-year basis. The stock has gained 35.6% over the past year and closed yesterday’s trading session at $46.52.
HLF’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock has an A grade for Value and Quality and B for Growth. We have also graded HLF for Stability, Sentiment and Momentum. Click here to access all HLF’s ratings.
HLF is ranked #4 of 12 stocks in the B-rated Medical - Consumer Goods industry.
Nu Skin Enterprises, Inc. (NUS)
Based in Provo, Utah, NUS is engaged in the development and distribution of personal care products and wellness products worldwide. The company sells its products under the Nu Skin, Pharmanex and ageLOC brands. NUS operates through seven geographic segments — Mainland China, South Korea, Southeast Asia, Americas/Pacific, Hong Kong/Taiwan, Europe, Middle East and Africa (EMEA) and Japan and two operational segments — Manufacturing and Grow Tech.
In February, 2021 NUS selected Ryan Napierski to its Board of Directors and tapped him to become the company’s next president and CEO effective September 1, 2021 when NUS’ current CEO Ritch Wood is expected to retire. NUS’ board of directors also declared a quarterly cash dividend of $0.38 per share payable on March 10, 2021. The company also announced the acquisition of 3i Solutions on January 26.
The company’s revenue has increased 28.3% year-over-year to $748.19 million for the fourth quarter. ended December 31, 2020. Its operating income came in at $88.70 million, up 62.2% year-over-year. Its gross profit increased nearly 25% year-over-year to $553.44 million. Its net income has increased 83.2% year-over-year to $73.47 million. And its EPS has increased 94.4% year-over-year to $1.40.
A consensus EPS estimate of $0.71 for the current quarter, ending March 31, 2021 represents an improvement of 97.2% year-over-year. Also, NUS surpassed the consensus EPS estimates in each of the trailing four quarters. A consensus revenue estimate of $633.67 million for the current quarter represents a 22.3% rise on a year-over-year basis. The stock has gained 108.7% over the past year and closed yesterday’s trading session at $51.66.
NUS’ strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to Strong Buy in our proprietary rating system.
The stock has an A grade for Value and Quality and B for Growth. We have also graded NUS for Stability, Sentiment and Momentum. Click here to access all of NUS’ ratings.
NUS is ranked #5 in the same industry.
The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
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HLF shares were unchanged in after-hours trading Wednesday. Year-to-date, HLF has declined -3.73%, versus a 2.02% rise in the benchmark S&P 500 index during the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market.
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