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

Volatility and Risk

Vitamin Shoppe has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500. Comparatively, Natural Grocers by Vitamin Cottage has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500.

Valuation & Earnings

This table compares Vitamin Shoppe and Natural Grocers by Vitamin Cottage’s gross 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 14.62
Natural Grocers by Vitamin Cottage $736.10 million 0.25 $44.65 million $0.41 19.90

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.

Insider and Institutional Ownership

34.0% of Natural Grocers by Vitamin Cottage shares are held by institutional investors. 1.1% of Vitamin Shoppe shares are held by insiders. Comparatively, 60.3% of Natural Grocers by Vitamin Cottage shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

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%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Vitamin Shoppe and Natural Grocers by Vitamin Cottage, as reported 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 106.14%. Natural Grocers by Vitamin Cottage has a consensus target price of $12.20, indicating a potential upside of 49.51%. Given Vitamin Shoppe’s higher probable upside, equities analysts plainly believe Vitamin Shoppe is more favorable than Natural Grocers by Vitamin Cottage.

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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