Opinions
Stan Wong
Metro Inc (A)
MRU-T
TOP PICK
May 19, 2016
Stock price when the opinion was issued
You might be interested:
High quality grocery, plus now a major drugstore operator. Targeted marketing to customers results in a higher spend per basket. Impressive management, impressive returns. Good balance sheet. At 17x, more expensive than the market, so avoid. Instead, try NWC at 13x and a bigger yield at 4.5%.
Trading at market multiple. Raised dividend. Low-risk business, with only 3 grocery stores in Canada. Took advantage of increase in food prices, but now prices are coming down. Excess profit will be squeezed out. Won't lose money, but won't make it either for the next 2 years. Enjoy the dividend.
It's broken out since mid-July in a solid run. We're late in the overall cycle in which energy, materials and staples thrive, because this is when inflation comes back. Unfortunately, he expects inflation to return in 2025. Staples can pass on inflation to consumers.
A very classical, traditional, consumers staple stock that provides investors with a very stable and predictable growth and earnings with a modest but growing dividend. They have $12 billion in sales and a network of 600 stores in Québec and Ontario. Trading at 17X earnings and a 10% growth rate and a dividend yield of 1.3%. The dividend has grown at 16% per year over the last 5 years. A very steady type of name, especially for this environment where things seem to be expensive.