PriceSmart (NASDAQ:PSMT – Get Free Report) and Natural Grocers by Vitamin Cottage (NYSE:NGVC – Get Free Report) are both consumer staples companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, risk, profitability, dividends and valuation.
Volatility and Risk
PriceSmart has a beta of 0.73, suggesting that its share price is 27% less volatile than the S&P 500. Comparatively, Natural Grocers by Vitamin Cottage has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500.
Profitability
This table compares PriceSmart and Natural Grocers by Vitamin Cottage’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| PriceSmart | 2.82% | 12.16% | 6.67% |
| Natural Grocers by Vitamin Cottage | 3.55% | 21.11% | 7.03% |
Valuation and Earnings
This table compares PriceSmart and Natural Grocers by Vitamin Cottage”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| PriceSmart | $5.27 billion | 0.99 | $147.89 million | $5.21 | 32.59 |
| Natural Grocers by Vitamin Cottage | $1.33 billion | 0.53 | $46.44 million | $2.06 | 14.86 |
PriceSmart has higher revenue and earnings than Natural Grocers by Vitamin Cottage. Natural Grocers by Vitamin Cottage is trading at a lower price-to-earnings ratio than PriceSmart, indicating that it is currently the more affordable of the two stocks.
Dividends
PriceSmart pays an annual dividend of $1.40 per share and has a dividend yield of 0.8%. Natural Grocers by Vitamin Cottage pays an annual dividend of $0.60 per share and has a dividend yield of 2.0%. PriceSmart pays out 26.9% of its earnings in the form of a dividend. Natural Grocers by Vitamin Cottage pays out 29.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. PriceSmart has raised its dividend for 4 consecutive years and Natural Grocers by Vitamin Cottage has raised its dividend for 1 consecutive years.
Analyst Recommendations
This is a breakdown of recent ratings for PriceSmart and Natural Grocers by Vitamin Cottage, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| PriceSmart | 0 | 0 | 2 | 0 | 3.00 |
| Natural Grocers by Vitamin Cottage | 0 | 2 | 3 | 0 | 2.60 |
PriceSmart presently has a consensus target price of $198.00, indicating a potential upside of 16.60%. Natural Grocers by Vitamin Cottage has a consensus target price of $43.00, indicating a potential upside of 40.49%. Given Natural Grocers by Vitamin Cottage’s higher possible upside, analysts clearly believe Natural Grocers by Vitamin Cottage is more favorable than PriceSmart.
Institutional and Insider Ownership
80.5% of PriceSmart shares are held by institutional investors. Comparatively, 32.0% of Natural Grocers by Vitamin Cottage shares are held by institutional investors. 17.0% of PriceSmart shares are held by insiders. Comparatively, 58.3% 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 company will outperform the market over the long term.
Summary
PriceSmart beats Natural Grocers by Vitamin Cottage on 9 of the 17 factors compared between the two stocks.
About PriceSmart
PriceSmart, Inc. owns and operates U.S.-style membership shopping warehouse clubs in the United States, Central America, the Caribbean, and Colombia. The company provides basic and private label consumer products under the Member's Selection brand, including groceries, cleaning supplies, health and beauty aids, meat, produce, deli, seafood, and poultry. It offers electronics, large and small appliances, automotive, hardware, sporting goods, seasonal products, clothing, domestics, and home furnishing products. In addition, the company offers food and bakery services, as well as health services, such as optical, audiology, and pharmacy. Further, it operates an e-commerce platform for online ordering, curbside pickup, and delivery services. PriceSmart, Inc. was incorporated in 1994 and is headquartered in San Diego, California.
About Natural Grocers by Vitamin Cottage
Natural Grocers by Vitamin Cottage, Inc., together with its subsidiaries, retails natural and organic groceries, and dietary supplements in the United States. The company’s stores offer natural and organic grocery products, such as organic produce; private label repackaged bulk products, including dried fruits, nuts, grains, granolas, teas, herbs, and spices, as well as peanut and almond butters; private label products comprising grocery staples, household products, bulk foods, and vitamins and dietary supplements, as well as organic eggs, organic flavored coffee, and organic mustard; dry, frozen, and canned groceries; meat and seafood products; dairy products, dairy substitutes, and eggs; prepared foods; bread and baked products; beverages; and beer, wine, and hard cider products. Its stores also provide name-brand supplements, as well as private label dietary supplements; body care products consisting of cosmetics, skin care, hair care, fragrance, and personal care products containing natural and organic ingredients; pet care and food products; books and handouts; household and general merchandise, including cleaning supplies, paper products, and dish and laundry soaps, as well as other common household products, such as diapers; and books and handouts. The company operates its retail stores under the Natural Grocers by Vitamin Cottage trademark, as well as Vitamin Cottage Natural Grocers and Health Hotline trademarks. The company also offers science-based nutrition education programs to help customers make informed health and nutrition choices. Natural Grocers by Vitamin Cottage, Inc. was founded in 1955 and is headquartered in Lakewood, Colorado.
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