Vitamin Shoppe (NYSE: VSI) and Natural Grocers by Vitamin Cottage (NYSE:NGVC) are both small-cap retail/wholesale companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, valuation, risk, earnings and profitabiliy.

Risk & Volatility

Vitamin Shoppe has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500. Comparatively, Natural Grocers by Vitamin Cottage has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Vitamin Shoppe and Natural Grocers by Vitamin Cottage, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vitamin Shoppe 1 5 1 0 2.00
Natural Grocers by Vitamin Cottage 0 4 1 0 2.20

Vitamin Shoppe presently has a consensus target price of $23.50, indicating a potential upside of 107.05%. Natural Grocers by Vitamin Cottage has a consensus target price of $12.20, indicating a potential upside of 51.55%. Given Vitamin Shoppe’s higher possible upside, equities research analysts clearly believe Vitamin Shoppe is more favorable than Natural Grocers by Vitamin Cottage.

Profitability

This table compares Vitamin Shoppe and Natural Grocers by Vitamin Cottage’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vitamin Shoppe 1.43% 9.35% 5.73%
Natural Grocers by Vitamin Cottage 1.25% 7.20% 3.25%

Institutional & Insider Ownership

34.0% of Natural Grocers by Vitamin Cottage shares are owned by institutional investors. 1.1% of Vitamin Shoppe shares are owned by insiders. Comparatively, 60.0% of Natural Grocers by Vitamin Cottage shares are owned 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.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Vitamin Shoppe $1.27 billion 0.21 $108.63 million $0.78 14.55
Natural Grocers by Vitamin Cottage $736.10 million 0.25 $44.65 million $0.41 19.63

Vitamin Shoppe has higher revenue and earnings than Natural Grocers by Vitamin Cottage. Vitamin Shoppe 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.

Summary

Vitamin Shoppe beats Natural Grocers by Vitamin Cottage on 7 of the 13 factors compared between the two stocks.

Vitamin Shoppe Company Profile

Vitamin Shoppe, Inc. (VSI) is a multi-channel specialty retailer and contract manufacturer of vitamins, minerals, herbs, specialty supplements, sports nutrition, and other health and wellness products. The Company operates through three segments: retail, direct and manufacturing. The retail segment includes Vitamin Shoppe, Super Supplements and Vitapath retail store formats. The direct segment sells its products directly to consumers through the Internet, primarily at www.vitaminshoppe.com. The manufacturing segment provides custom manufacturing and private labeling of vitamin, mineral and supplement products, and develops and markets its own branded products for both sales to third parties and for the VSI product assortment. As of December 31, 2016, it marketed approximately 900 brands, as well as its own brands. As of December 31, 2016, it operated 775 stores located in 45 states, the District of Columbia and Puerto Rico, primarily located in retail centers and standalone locations.

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.

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