Top 5 Canadian Grocery Stocks to Buy and Forget.

Melisa R. H. Posted On January 31, 2019

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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.

🛍 Consumer

Canadian groceries y drugstores

Metro Inc (A) (MRU-T)

Metro Inc (A) (MRU-T) — Stockchase

MRU-T vs. EMP.A-T. Metro has been his favourite grocery stock for 15 years. Grocery are the stay-at-home stocks but as we exit the pandemic this is not where you want to be. Don’t buy until the rotation is completed.

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Loblaw Companies Ltd (L-T)

Loblaw Companies Ltd (L-T) — Stockchase

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. A nice stable stock with a secure dividend. Although it may only show slow growth, it is a defensive play in case of volatility and downturn. Unlock Premium - Try 5i Free

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Empire Company (A) (EMP.A-T)

Empire Company (A) (EMP.A-T) — Stockchase

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Goodfood Market Corp. (FOOD-T)

Goodfood Market Corp. (FOOD-T) — Stockchase

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. A fast growing company that has net cash on its balance sheet. It should be profitable next year. It currently trades around 1.2x sales. The space is competitive but the company executes well. Unlock Premium - Try 5i Free

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North West Company (NWC-T)

North West Company (NWC-T) — Stockchase

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. They beat EPS estimates by 4 cents, at 70 cents. EBITDA beat estimates by 20% at $83.6M. Same store sales rose. They continue to benefit from the pandemic and have controlled costs well. Unlock Premium - Try 5i Free

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These companies are a threat:

Walmart Inc (WMT-N)

Walmart Inc (WMT-N) — Stockchase

He holds Costco instead, as it brings in 3x as much in sales. WMT is a good name, but has lower growth prospects. Trying to enhance their digital experience, and he can't predict results just yet. 26x earnings, 6% earnings growth. Not cheap, but not expensive.

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Costco Wholesale (COST-Q)

Costco Wholesale (COST-Q) — Stockchase

E-commerce will continue to be a trend this year with Covid; it's here to stay. This will be the year of Walmart and Costco, both of which were crushed today, but that means a buying opportunity.

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Convenience Store.

Alimentation Couche-Tard (B) (ATD.B-T)

Alimentation Couche-Tard (B) (ATD.B-T) — Stockchase

The French government has expressed its disagreement with ATD's acquisition of Carrefour. If they do business in France, they must abide by their strict labour laws. Does not think there will be a huge upside. Longer term, the stock's outlook is quite positive. The acquisition may not go through. Looking at the chart, there has…

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