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 GNC Holdings (NYSE: GNC  ) 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.

GNC facts

Headquarters (founded)	Pittsburgh, Pa. (1935)
Market Cap	$4.6 billion
Industry	Specialty stores
Trailing-12-Month Revenue	$2.5 billion
Management	Chairman/CEO Joseph Fortunato CFO Michael Nuzzo
Trailing-12-Month Return on Equity	25.6%
Cash/Debt	$176.2 million/$1.1 billion
Dividend Yield	1.3%
Competitors	Amazon.com  CVS Caremark  Walgreen

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.   

Earlier this month, one of those bulls, fellow Fool Thomas Engle (TMF1000), succinctly summed up the outperform case for our community:

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 (NYSE: VSI  ) ] 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.

The retail space is in the midst of the biggest paradigm shift since mail order took off at the turn of the last century. Only those most forward-looking and capable companies will survive, and they'll handsomely reward those investors who understand the landscape. You can read about the 3 Companies Ready to Rule Retail in The Motley Fool's special report. Uncovering these top picks is free today; just click here to read more.