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Tesco

TSCDY
41
Grocery Stores · Consumer Defensive
Price
$18.55
-0.26 (-1.38%)
Market Cap
$38.75B
Exchange
Other OTC
Winston Score
41
Winston is serious
Mixed quality — meaningful strengths and weaknesses.
Data as of Aug 13, 2026 · filings through Feb 28, 2026

Share count falling — buybacks

14.7% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 2.58B (2022) → 2.20B (2026)

Tesco is one of the largest grocery retailers in the world, headquartered in the United Kingdom. It runs thousands of supermarkets, smaller convenience stores, and online grocery delivery services, selling food, household goods, clothing, and electronics to everyday shoppers. Tesco also owns the Booker wholesale business, which supplies restaurants, cafes, and smaller shops across the UK.

Tesco makes most of its money by selling products directly to customers in its stores and through its website, keeping a small margin on each sale — which is typical for grocery retail. It operates primarily in the UK and Ireland, with a smaller presence in Central Europe, and generates roughly $70 billion in annual revenue, making it one of Europe's biggest retailers. Its Clubcard loyalty program gives it detailed data on customer habits, which helps it compete against discounters like Aldi and Lidl — the continued growth of those discount rivals remains one of the biggest ongoing pressures on Tesco's margins.

Winston Score History

Growth Profile

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

Revenue Growth

+7.0% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

+30.0% YoY

YoY Growth Rate

Strong earnings growth

R&D Spend

$0/ year

0.0% of revenue

Below sector average (2%)

Research and development spending

Insider Activity

2.9%ownership

Relatively low insider ownership

Cash Position

Cash flow positive

$6.1B cash & investments

Quarterly Free Cash Flow

↓ Burn rate worsening

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

Growth context

Tesco is growing revenue at 7% 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
7.3%
Thin — 7.3% gross margin
Operating Margin
4.0%
Thin — 4.0% operating margin
ROCE
8.0%
Weak — 8.0% 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
+5.3%
Slow sales growth (+5.3% YoY)
EPS YoY
+12.5%
Earnings growing (+12.5% YoY)

Healthy double-digit earnings growth — what compounders look like.

EPS Consistency
4/8 quarters
Earnings inconsistent quarter-to-quarter

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Cash Flow

Cash Conversion
277%
Turns 277% of profit into real cash
FCF Margin
4.6%
Thin free cash flow (4.6%)

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

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Stability

Debt / Equity
0.63
Moderate — manageable debt (0.63)
Interest Cover
3.47x
Tight — interest eats into profit (3.5x)

Interest coverage between 3 and 8. Profits cover interest several times over.

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Valuation

P/E Ratio (TTM)
22.9x
Growth-priced — P/E 22.9

P/E above the market average. People are paying up for expected growth.

P/E vs Forward
+5.2
GROWING
Earnings expected to grow meaningfully — cheaper on forward P/E (22.9 → 17.7)

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Dividends

Dividend Yield
3.14%
Moderate income — 3.14% yield

Standard yield zone for stable dividend payers. A meaningful piece of total return.

Dividend Growth
+29.4%
Dividend growing fast (29.4% YoY)

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