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
You want defensive stocks right now. Big thing is Jean Coutu, and integration will create earnings and cash flow growth. More difficult issue is how to expand that brand beyond Quebec, and this is already priced into the stock. A defensive name, and you can do quite well. Yield is 1.7%.
On strike in Newfoundland for the past month A steady business and doing well during Covid. Loblaw also owns pharmacies. It's reasonably priced in the high-$60s.
She owns another name in food retailing/grocers, who have benefitted from strong same-store sales growth, though this growth will moderate as economies open up more and eat out more. All retailers are increasing digital shopping and home delivery, though. It's a competitive space. All names have benefitted from the pandemic, but Empire doesn't offer much…
(A Top Pick Sep 10/19, Up 145%) The pandemic accelerate their already high growth. It's one of the top 30 performing stocks YTD. They reach 280,000 Canadian subs as the largest meal-kit company. Revenues had shot up five-fold over recent years when he bought this at $1.40. They just reported their first profit ever, proving…
Allan Tong’s Discover Picks This consumer defensive name operates retail stores, selling groceries and household items, in the Canadian far north, Alaska and Caribbean. Because it operates in such an extreme geography, NWC enjoys a monopoly. North West Company pays 4.45% dividend. Read Best Dividend Stocks Canada for our full analysis.
These companies are a threat:
(A Top Pick Oct 17/19, Up 21%) He has sold it on a valuation basis. 56% of their revenues comes from groceries, which is a low margin business, which does not justify trading at high 20 multiples. It is a stretch. The company has done everything you expect, but the valuation did not make sense…
If Biden wins COST has enough money on its books to pay a huge special dividend. With Biden winning, dividend taxes may rise, which would sput COST to pay their special dividend sooner than later.
Has a 7% free cash flow yield. The market is annoyed they haven't made an acquisition recently, but he's fine with that. They've produced a ROE of 20% for decades, and are undervalued now. He doubled his position in the low-$40s. There is some concern over e-cars, but ATD has been testing EV stations in…