Walmart (NASDAQ:WMT) and Natural Grocers by Vitamin Cottage (NYSE:NGVC) Critical Contrast

Walmart (NASDAQ:WMT) and Natural Grocers by Vitamin Cottage (NYSE:NGVC) are both consumer staples companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, dividends, valuation, analyst recommendations, earnings, profitability and institutional ownership.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Walmart	$713.16 billion	1.19	$21.89 billion	$2.77	38.68
Natural Grocers by Vitamin Cottage	$1.33 billion	0.50	$46.44 million	$2.06	13.91

Walmart 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 Walmart, indicating that it is currently the more affordable of the two stocks.

Dividends

Walmart pays an annual dividend of $0.99 per share and has a dividend yield of 0.9%. Natural Grocers by Vitamin Cottage pays an annual dividend of $0.60 per share and has a dividend yield of 2.1%. Walmart pays out 35.7% 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. Walmart has increased its dividend for 53 consecutive years and Natural Grocers by Vitamin Cottage has increased its dividend for 1 consecutive years. Natural Grocers by Vitamin Cottage is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Walmart	3.00%	21.83%	7.80%
Natural Grocers by Vitamin Cottage	3.55%	21.11%	7.03%

Analyst Recommendations

This is a summary of recent ratings for Walmart and Natural Grocers by Vitamin Cottage, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Walmart	0	4	32	3	2.97
Natural Grocers by Vitamin Cottage	0	1	2	0	2.67

Walmart currently has a consensus target price of $131.88, suggesting a potential upside of 23.08%. Natural Grocers by Vitamin Cottage has a consensus target price of $47.00, suggesting a potential upside of 64.03%. Given Natural Grocers by Vitamin Cottage’s higher probable upside, analysts clearly believe Natural Grocers by Vitamin Cottage is more favorable than Walmart.

Institutional and Insider Ownership

26.8% of Walmart shares are held by institutional investors. Comparatively, 32.0% of Natural Grocers by Vitamin Cottage shares are held by institutional investors. 0.1% of Walmart 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 hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Risk and Volatility

Walmart has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500. Comparatively, Natural Grocers by Vitamin Cottage has a beta of 1.3, indicating that its stock price is 30% more volatile than the S&P 500.

Summary

Walmart beats Natural Grocers by Vitamin Cottage on 11 of the 18 factors compared between the two stocks.

About Walmart

Walmart Inc. engages in the operation of retail, wholesale, other units, and eCommerce worldwide. The company operates through three segments: Walmart U.S., Walmart International, and Sam's Club. It operates supercenters, supermarkets, hypermarkets, warehouse clubs, cash and carry stores, and discount stores under Walmart and Walmart Neighborhood Market brands; membership-only warehouse clubs; ecommerce websites, such as walmart.com.mx, walmart.ca, flipkart.com, PhonePe and other sites; and mobile commerce applications. The company offers grocery and consumables, including dairy, meat, bakery, deli, produce, dry, chilled or frozen packaged foods, alcoholic and nonalcoholic beverages, floral, snack foods, candy, other grocery items, health and beauty aids, paper goods, laundry and home care, baby care, pet supplies, and other consumable items; fuel, tobacco and other categories. It is also involved in the provision of health and wellness products covering pharmacy, optical and hearing services, and over-the-counter drugs and other medical products; and home and apparel including home improvement, outdoor living, gardening, furniture, apparel, jewelry, tools and power equipment, housewares, toys, seasonal items, mattresses and tire and battery centers. In addition, the company offers consumer electronics and accessories, software, video games, office supplies, appliances, and third-party gift cards. Further, it operates digital payment platforms; and offers financial services and related products, including money transfers, bill payments, money orders, check cashing, prepaid access, co-branded credit cards, installment lending, and earned wage access. Additionally, the company markets lines of merchandise under private brands, including Allswell, Athletic Works, Equate, and Free Assembly. The company was formerly known as Wal-Mart Stores, Inc. and changed its name to Walmart Inc. in February 2018. Walmart Inc. was founded in 1945 and is based in Bentonville, Arkansas.

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.