Contrasting Medifast (NYSE:MED) & Danone (OTCMKTS:DANOY)

Danone (OTCMKTS:DANOY) and Medifast (NYSE:MED) are both consumer staples companies, but which is the better business? We will compare the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Danone	N/A	N/A	N/A
Medifast	0.06%	-0.89%	-0.69%

Earnings & Valuation

This table compares Danone and Medifast”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Danone	$29.63 billion	2.08	$2.19 billion	N/A	N/A
Medifast	$429.70 million	0.30	$2.09 million	$0.01	1,182.00

Danone has higher revenue and earnings than Medifast.

Volatility and Risk

Danone has a beta of 0.27, indicating that its stock price is 73% less volatile than the S&P 500. Comparatively, Medifast has a beta of 0.48, indicating that its stock price is 52% less volatile than the S&P 500.

Insider & Institutional Ownership

0.1% of Danone shares are held by institutional investors. Comparatively, 95.5% of Medifast shares are held by institutional investors. 1.0% of Danone shares are held by insiders. Comparatively, 2.9% of Medifast shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Danone pays an annual dividend of $0.34 per share and has a dividend yield of 1.9%. Medifast pays an annual dividend of $6.60 per share and has a dividend yield of 55.8%. Medifast pays out 66,000.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Danone and Medifast, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Danone	1	2	2	0	2.20
Medifast	1	1	0	0	1.50

Medifast has a consensus target price of $16.50, suggesting a potential upside of 39.59%. Given Medifast’s higher probable upside, analysts plainly believe Medifast is more favorable than Danone.

Summary

Danone beats Medifast on 8 of the 14 factors compared between the two stocks.

About Danone

Danone S.A. operates in the food and beverage industry in Europe, Ukraine, North America, China, North Asia, the Oceania, Latin America, rest of Asia, Africa, Turkey, the Middle East, and the Commonwealth of Independent States. The company operates through Essential Dairy & Plant-Based, Specialized Nutrition, and Waters segments. It produces and distributes yogurts, dairy products, coffee creamers and drinks, beverages, plant-based products, ice creams, frozen desserts, and cheese products under the Actimel, Activia, Alpro, Aptamil, Danette, Danio, Danonino, evian, Nutricia, Nutrilon, Volvic, Danone, Light & Fit, Oikos, YoPRO, International Delight, SToK, Silk, Follow Your Heart, and So Delicious. The company also provides specialized nutrition, including formulas and complementary feeding for babies and young children; and special medical purposes food for children and adults under the Aptamil, Nutrilon, Gallia, Cow & Gate, Bebelac, and Blédina brands. In addition, it offers tube feeding products under the Nutrison name; and oral nutritional supplements under the Fortimel and NutriDrink names. Further, the company provides mineral waters from natural sources, waters infused with natural fruit extracts, fruit juices, and vitamins under the evian, Volvic, AQUA, Mizone, Bonafont, Salus, Hayat, Sirma, Font Vella, Lanjarón, and Zywiec Zdroj brands. It distributes its products through retail chains and traditional market outlets; convenience stores; hotels, restaurants, and coffee outlets; hospitals, clinics, and pharmacies; and e-commerce channels. The company was formerly known as Groupe Danone and changed its name to Danone S.A. in April 2009. Danone S.A. was incorporated in 1899 and is headquartered in Paris, France.

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.