Loblaw keeps prospering

Article Excerpt

LOBLAW COMPANIES, $62.64, (Toronto symbol L; Shares outstanding: 347.4 million; Market cap: $21.8 billion; TSINetwork Rating: Above Average; Dividend yield: 2.1%; www.loblaw.ca) is a buy. The company continues to benefit from strong demand for groceries as COVID-19 lockdowns prompt people to eat more of their meals at home. In the quarter ended January 2, 2021, Loblaw’s overall sales rose 14.6%, to $13.29 billion from $11.59 billion a year earlier. Same-store sales for its supermarkets rose 8.6% from a year earlier due to the higher customer purchases per visit as well as rising prices. Shoppers Drug Mart’s overall same-store sales gained 3.7% in the quarter. Earnings per share in the latest quarter rose 15.6%, to $1.26 from $1.09. The company will probably continue to enjoy elevated customer traffic levels and sales for much of 2021. That will help lift its projected earnings for the year by about 10% to $4.69 a share. The stock trades at a reasonable 13.4 times that forecast. Loblaw Cos. is a buy. buy…