Natural Grocers by Vitamin Cottage

NGVC

Grocery Stores · Consumer Defensive

Price

$32.73

-0.20 (-0.61%)

Market Cap

$754.1M

Winston Score

Winston is curious

A decent business — some strong pillars, some weaker.

Share count rising — dilution

+2.4% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 22.7M (2021) → 23.3M (2025)

Natural Grocers by Vitamin Cottage is a grocery store chain that sells organic and natural foods, vitamins, and supplements. It focuses on customers who want healthier, chemical-free products and has strict standards — for example, it does not sell products with artificial colors, flavors, or sweeteners. The company operates mostly in the western and central United States and has around 170 stores.

The company makes money the traditional grocery way: customers pay for products in stores, and Natural Grocers keeps a portion after paying for the goods it sells. Its gross margin of about 29% is decent for grocery retail, and its loyalty program and strict product standards help it stand out from larger competitors like Whole Foods and Sprouts. The main risk is that grocery retail is highly competitive and operates on thin margins, meaning any increase in costs or loss of customers to bigger chains could quickly pressure profits.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+0.5% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

+1.8% YoY

YoY Growth Rate

Slow EPS growth

R&D Spend

$0/ year

0.0% of revenue

Below sector average (2%)

Research and development spending

Insider Activity

58.3%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$21M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth context

Natural Grocers by Vitamin Cottage is growing revenue at 0% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

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Quality

Gross Margin

28.0%

Modest — 28.0% gross margin

Operating Margin

5.5%

Thin — 5.5% operating margin

ROCE

6.8%

Weak — 6.8% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales YoY

+4.9%

Slow sales growth (4.9% YoY)

EPS YoY

+32.3%

Earnings growing fast (32.3% YoY)

Earnings growing 25%+ a year. The compounder zone.

EPS Consistency

8/8 quarters

Every recent quarter grew earnings vs last year

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Cash Flow

Cash Conversion

220%

Turns 220% of profit into real cash

FCF Margin

4.8%

Thin free cash flow (4.8%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity

0.19

Conservative — low debt load (0.19)

Interest Cover

24.28x

Comfortably covers interest (24.3x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

15.1x

Fair value — P/E 15.1

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

P/E vs Forward

+2.5

GROWING

Earnings expected to grow — slightly cheaper on forward P/E

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Dividends

Dividend Yield

1.75%

Small dividend — 1.75% yield

Modest yield. The bulk of any return needs to come from price appreciation.

Dividend Growth

+23.9%

Dividend growing fast (23.9% YoY)

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