Top 5 Canadian Grocery Stocks to Buy and Forget.

Melisa R. H. Posted On January 31, 2019

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

Believes company is very predictable which results in consistent earnings. Company is a good hedge against volatility in the market. Ability for company to raise dividend is a major strength.

stockchase.com

Loblaw Companies Ltd (L-T)

Loblaw Companies Ltd (L-T) — Stockchase

Might be ahead of itself. Grocery inflation is helping. Pricing erosion to Shoppers Drug Mart. Trades at 16x, growth of 12%. If inflation abates over the next 2 years, excitement's already baked into the stock. Don't add here, wait for a much lower level.

stockchase.com

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

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

Very solid. Decent hold here. Low growth sector, about 5%. Good franchise. On weakness below $37, look at buying. If you're negative on the market, safe place to be. If you're positive on the market, there are better places for your money. Yield of 1.5% that will slowly increase over time.

stockchase.com

Goodfood Market Corp. (FOOD-T)

Goodfood Market Corp. (FOOD-T) — Stockchase

(A Top Pick Apr 28/21, Down 67.4%) Are building online grocery sales now. When he recommended it, he expected another leg up--and shares rose last summer on good numbers. But he sold this around $10 because he was concerned the company was no longer focusing on meal kits and was spending a lot to enter…

stockchase.com

North West Company (NWC-T)

North West Company (NWC-T) — Stockchase

A safe place to invest--groceries in remote areas of Canada. Stocks are pricey vs. historic multiples, because they are defensive and stable. If you own, hold on or take some profits. Good to hold this in an uncertain world. They're well-managed.

stockchase.com

These companies are a threat:

Walmart Inc (WMT-N)

Walmart Inc (WMT-N) — Stockchase

They have built up too much inventory. Data shows that consumers are spending more experiences and less on things. This stock will suffer for a little longer.

stockchase.com

Costco Wholesale (COST-Q)

Costco Wholesale (COST-Q) — Stockchase

They get a lot of foot traffic for gas; revenues are sustainable. They could report better next week than expected.

stockchase.com

Convenience Store.

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

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

SLF vs. ATD'B ATD is doing very well because oil prices are high. Also, they are on the verge of buying a company. Both add to upside. SLF is the best Canadian insurer, with stable, but slow earnings growth. It will benefit from higher interest rates. Buy and put away and own for the dividend.…

stockchase.com