METRO INC. $45

METRO INC. $45 (Toronto symbol MRU; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 237.4 million; Market cap: $10.7 billion; Price-to-sales ratio: 0.8; Dividend yield: 1.2%; TSINetwork Rating: Average; www.metro.ca) operates 600 grocery stores and 250 drug stores in Quebec and Ontario.

During the current fiscal year, ending September 30, 2016, the company plans to open 10 new stores and renovate 30 more locations. It’s also working on a plan to let shoppers buy their groceries online. In all, these projects should cost $350 million.

Metro can comfortably afford these projects: as of March 12, 2016, its long-term debt of $1.3 billion was a low 12% of its market cap. It also held cash of $50.8 million.

The stock is up 30% in the past year. Even so, it trades at a reasonable 18.9 times the $2.38 a share the company will probably earn in 2016. The $0.56 dividend yields 1.2%.

Metro is a buy.

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