Dollar Tree (NASDAQ:DLTR) & Natural Grocers by Vitamin Cottage (NYSE:NGVC) Critical Review

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

Institutional and Insider Ownership

97.4% of Dollar Tree shares are owned by institutional investors. Comparatively, 32.0% of Natural Grocers by Vitamin Cottage shares are owned by institutional investors. 7.1% of Dollar Tree shares are owned by insiders. Comparatively, 58.3% of Natural Grocers by Vitamin Cottage shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Dollar Tree has a beta of 0.71, indicating that its stock price is 29% less volatile than the S&P 500. Comparatively, Natural Grocers by Vitamin Cottage has a beta of 1.27, indicating that its stock price is 27% more volatile than the S&P 500.

Earnings and Valuation

This table compares Dollar Tree 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
Dollar Tree	$20.07 billion	1.16	$1.28 billion	$8.19	15.16
Natural Grocers by Vitamin Cottage	$1.33 billion	0.53	$46.44 million	$2.06	14.86

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Dollar Tree	8.03%	38.61%	9.94%
Natural Grocers by Vitamin Cottage	3.55%	21.11%	7.03%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Dollar Tree and Natural Grocers by Vitamin Cottage, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dollar Tree	2	13	11	0	2.35
Natural Grocers by Vitamin Cottage	0	2	3	0	2.60

Dollar Tree currently has a consensus price target of $133.14, suggesting a potential upside of 7.21%. Natural Grocers by Vitamin Cottage has a consensus price target of $43.00, suggesting a potential upside of 40.49%. Given Natural Grocers by Vitamin Cottage’s stronger consensus rating and higher probable upside, analysts clearly believe Natural Grocers by Vitamin Cottage is more favorable than Dollar Tree.

Summary

Dollar Tree beats Natural Grocers by Vitamin Cottage on 10 of the 14 factors compared between the two stocks.

About Dollar Tree

Dollar Tree, Inc. operates retail discount stores. The company operates in two segments, Dollar Tree and Family Dollar. The Dollar Tree segment offers merchandise at the fixed price of $ 1.25. It provides consumable merchandise, which includes everyday consumables, such as household paper and chemicals, food, candy, health, personal care products, and frozen and refrigerated food; variety merchandise comprising toys, durable housewares, gifts, stationery, party goods, greeting cards, softlines, arts and crafts supplies, and other items; and seasonal goods that include Christmas, Easter, Halloween, and Valentine's Day merchandise. It operates stores under the Dollar Tree and Dollar Tree Canada brands, as well as distribution centers in the United States and Canada. The Family Dollar segment operates general merchandise retail discount stores that offer consumable merchandise, which comprise food and beverages, tobacco, health and personal care, household chemicals, paper products, hardware and automotive supplies, diapers, batteries, and pet food and supplies; and home products, including housewares, home décor, and giftware, as well as domestics, such as comforters, sheets, and towels. It also provides apparel and accessories merchandise comprising clothing, fashion accessories, and shoes; and seasonal and electronics merchandise that include Christmas, Easter, Halloween, and Valentine's Day merchandise, as well as personal electronics, which comprise pre-paid cellular phones and services, stationery and school supplies, and toys. Dollar Tree, Inc. was founded in 1986 and is based in Chesapeake, Virginia.

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.