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Tesco

TSCDF
38
Grocery Stores · Consumer Defensive
Price
$6.50
+0.03 (+0.53%)
Market Cap
$40.51B
Exchange
Other OTC
Winston Score
38
Winston is serious
Below-average fundamentals — multiple weak pillars.

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: 7.75B (2022) → 6.61B (2026)

Tesco is one of the largest grocery retailers in the world, selling food, drinks, household goods, and clothing to everyday shoppers. It operates thousands of supermarkets and smaller convenience stores, mainly in the United Kingdom and Ireland, under the Tesco brand. It also runs a banking and insurance business called Tesco Bank.

Tesco makes most of its money from in-store and online grocery sales, with customers paying directly for products at checkout. Its scale gives it strong buying power with suppliers, which is a key competitive advantage in a low-margin industry. The company faces ongoing pressure from discount rivals like Aldi and Lidl, which have steadily taken market share in the UK by offering lower prices — and managing that competition while protecting its own margins remains the central challenge for the business going forward.

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

+7.5% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

+51.7% YoY

YoY Growth Rate

EPS growth accelerating

R&D Spend

$0/ year

0.0% of revenue

Below sector average (2%)

Research and development spending

Insider Activity

2.7%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 8% 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%
Below par — 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
+7.4%
Steady sales growth (7.4% YoY)
EPS YoY
-10.0%
Earnings shrinking (-10.0% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

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

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Cash Flow

Cash Conversion
250%
Turns 250% of profit into real cash
FCF Margin
2.6%
Thin free cash flow (2.6%)

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
3.50x
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)
16.5x
Fair value — P/E 16.5

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

P/E vs Forward
-0.9
SLOWING
Earnings expected to fall — forward P/E higher than today

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Dividends

Dividend Yield
3.11%
Moderate income — 3.11% yield

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

Dividend Growth
+32.0%
Dividend growing fast (32.0% YoY)

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