In a crowded market, Metro stands out

Article Excerpt

METRO INC. $45 (Toronto symbol MRU.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 105.8 million; Market cap: $4.8 billion; Price-to-sales ratio: 0.4; Dividend yield: 1.5%; SI Rating: Average) operates roughly 660 grocery stores in Quebec and Ontario. Its major banners include Metro, Metro Plus, Super C and Food Basics. As well, Metro operates 267 drug stores, including 81 inside its supermarkets. The company also owns roughly 23% of Alimentation Couche-Tard Inc. (Toronto symbol ATD.B), which operates over 6,000 convenience stores in Canada and the U.S. Couche-Tard is a recommendation of Stock Pickers Digest, our publication for aggressive investors. This investment accounts for about 5% of Metro’s annual earnings. Big purchase still paying off In 2005, Metro bought A&P Canada, which had 240 stores in Ontario, for $1.7 billion. That helped it expand out of its home market of Quebec. Thanks to A&P, Metro’s sales jumped 64.7%, from $6.6 billion in 2005 to $10.9 billion in 2006 (Metro’s fiscal year ends September 30). Sales slipped…

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