Natural Grocers by Vitamin Cottage (NYSE: NGVC) and Kroger Company (The) (NYSE:KR) are both retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitabiliy, risk, institutional ownership, dividends, analyst recommendations, valuation and earnings.

Dividends

Kroger Company (The) pays an annual dividend of $0.48 per share and has a dividend yield of 2.2%. Natural Grocers by Vitamin Cottage does not pay a dividend. Kroger Company (The) pays out 28.9% of its earnings in the form of a dividend. Kroger Company (The) has increased its dividend for 8 consecutive years.

Profitability

This table compares Natural Grocers by Vitamin Cottage and Kroger Company (The)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Natural Grocers by Vitamin Cottage 1.25% 7.20% 3.25%
Kroger Company (The) 1.35% 29.10% 5.29%

Valuation and Earnings

This table compares Natural Grocers by Vitamin Cottage and Kroger Company (The)’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Natural Grocers by Vitamin Cottage $736.10 million 0.27 $44.65 million $0.41 21.29
Kroger Company (The) $115.34 billion 0.18 $5.87 billion $1.66 13.43

Kroger Company (The) has higher revenue and earnings than Natural Grocers by Vitamin Cottage. Kroger Company (The) is trading at a lower price-to-earnings ratio than Natural Grocers by Vitamin Cottage, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Natural Grocers by Vitamin Cottage has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500. Comparatively, Kroger Company (The) has a beta of 0.73, suggesting that its share price is 27% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Natural Grocers by Vitamin Cottage and Kroger Company (The), as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Natural Grocers by Vitamin Cottage 0 4 1 0 2.20
Kroger Company (The) 1 14 10 0 2.36

Natural Grocers by Vitamin Cottage currently has a consensus target price of $12.60, indicating a potential upside of 44.33%. Kroger Company (The) has a consensus target price of $32.43, indicating a potential upside of 45.48%. Given Kroger Company (The)’s stronger consensus rating and higher probable upside, analysts plainly believe Kroger Company (The) is more favorable than Natural Grocers by Vitamin Cottage.

Insider and Institutional Ownership

34.0% of Natural Grocers by Vitamin Cottage shares are held by institutional investors. Comparatively, 77.9% of Kroger Company (The) shares are held by institutional investors. 60.3% of Natural Grocers by Vitamin Cottage shares are held by insiders. Comparatively, 0.9% of Kroger Company (The) 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.

Summary

Kroger Company (The) beats Natural Grocers by Vitamin Cottage on 12 of the 17 factors compared between the two stocks.

Natural Grocers by Vitamin Cottage Company Profile

Natural Grocers By Vitamin Cottage Inc. (Natural Grocers) is a specialty retailer of natural and organic groceries and dietary supplements. The Company sells natural and organic groceries and dietary supplements. The Company’s grocery products include: bulk food and private label products, dry, frozen and canned groceries, meats and seafood, dairy products and dairy substitutes, prepared foods, bread and baked goods, and beverages. Natural Grocers’ other products include body care, pet care, household and general merchandise, and books and handouts. The Company’s 107,000 square foot bulk food repackaging facility and distribution center is in Golden, Colorado. The Company stock approximately 400 titles in its book department. Titles cover various approaches to diet, lifestyle and health. The Company’s subsidiaries include Vitamin Cottage Natural Food Markets, Inc. and Vitamin Cottage Two Ltd. Liability Company and Natural Systems, LLC.

Kroger Company (The) Company Profile

The Kroger Co. (Kroger) manufactures and processes food for sale in its supermarkets. The Company operates supermarkets, multi-department stores, jewelry stores and convenience stores throughout the United States. As of January 28, 2017, it had operated approximately 4,000 owned or leased supermarkets, convenience stores, fine jewelry stores, distribution warehouses and food production plants through divisions, subsidiaries or affiliates. These facilities are located throughout the United States. As of January 28, 2017, Kroger operated, either directly or through its subsidiaries, 2,796 supermarkets under a range of local banner names, of which 2,255 had pharmacies and 1,445 had fuel centers. As of January 28, 2017, the Company offered ClickList and Harris Teeter ExpressLane, personalized, order online, pick up at the store services at 637 of its supermarkets. P$$T, Check This Out and Heritage Farm are the three brands. Its other brands include Simple Truth and Simple Truth Organic.

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