Natural Grocers by Vitamin Cottage, Inc. (NYSE:NGVC) will increase its dividend from last year’s comparable payment on the 10th of December to $0.15. This makes the dividend yield 2.1%, which is above the industry average.
While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Natural Grocers by Vitamin Cottage’s stock price has reduced by 32% in the last 3 months, which is not ideal for investors and can explain a sharp increase in the dividend yield.
A big dividend yield for a few years doesn’t mean much if it can’t be sustained. However, prior to this announcement, Natural Grocers by Vitamin Cottage’s dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.
If the trend of the last few years continues, EPS will grow by 17.9% over the next 12 months. If the dividend continues along recent trends, we estimate the payout ratio will be 25%, which is in the range that makes us comfortable with the sustainability of the dividend.
NYSE:NGVC Historic Dividend November 25th 2025
See our latest analysis for Natural Grocers by Vitamin Cottage
It is great to see that Natural Grocers by Vitamin Cottage has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. Since 2019, the annual payment back then was $0.28, compared to the most recent full-year payment of $0.60. This means that it has been growing its distributions at 14% per annum over that time. Natural Grocers by Vitamin Cottage has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. We are encouraged to see that Natural Grocers by Vitamin Cottage has grown earnings per share at 18% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Natural Grocers by Vitamin Cottage’s prospects of growing its dividend payments in the future.
Overall, a dividend increase is always good, and we think that Natural Grocers by Vitamin Cottage is a strong income stock thanks to its track record and growing earnings. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in Natural Grocers by Vitamin Cottage stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
