Grocery stocks are great consumer staple stocks that are defensive in times of volatility, such as what we have seen in the past months. Metro has been hitting its 52-week high, as seen on our high list.
Big box stores such as Costco and Walmart are threatening the growth of grocery stores, as they create super centres that offer much more than just groceries and can sometimes offer better value. These companies are ramping up their grocery section and are looking into online as well. The minimum wage situation could also affect grocery stores negatively, since they run on pretty tight margins. Competition could cut revenues and leave grocery stores vulnerable. However, people have to eat and grocery stores aren’t going anywhere so this might be a good place to hide during stock market storms.
Couche-Tard, who’s weathered the sell-off, is growing its business and might threaten the classic grocery store with its convenience and availability. As a company that continually adds value to stockholders, this could be a good alternative buy.
Canadian groceries y drugstores
It is the best run of the grocery stores. They made an acquisition to get into delivery in the downtown core. Nice dividend yield and you can sleep at night. (Bruce Murray)
Grocers got hit in the last quarter last year. There is high competition and the acquisition of Shoppers was good. However, the low yield holds him back from buying. Yield 2% (Ryan Bushell)
(A Top Pick Jul 24/18, Up 15%) They are doing well in a tight competitive space and a candidate for purchase again. He does not own it today. (Robert McWhirter)
One of fastest growing companies on TSX. About 45% market share. Subscriber base and revenues have quintupled, but the price hasn't gone up as much. Valuation today is less than a year ago. Expects subscriber base to rise 150% over the next year. The stock has a lot higher to go. No dividend. (Analysts’ price…
They are almost a regulated company as they are so subsidized. It is a decent but very slow growth company. He would look elsewhere. (Bruce Murray)
These companies are a threat:
It will do relativity well going forward. It is facing a lot of competition though and trading at 20 times earnings. Growth rate is weak at 2-3%. It looks that it not winning the war with Amazon. He prefers other names in the space. (Stan Wong)
Safe place to be. Constantly produces high single digit growth. Good balance sheet. They treat their employees well and that counts in the long term. They haven't been Amazoned yet. (Chris Stuchberry)
Circle-K is their brand. They are linked to convenience stores and gasoline sales. There has been consolidation in the gasoline retailer space and margins in the space have been great. He would continue to hold. (Norman Levine)