Shoppers deal has transformed Loblaw

Article Excerpt

LOBLAW COMPANIES LTD. $64 (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 412.6 million; Market cap: $26.4 billion; Price-to-sales ratio: 0.6; Dividend yield: 1.6%; TSINetwork Rating: Above Average; www.loblaw.ca) is Canada’s largest food retailer, with 1,140 stores. Its banners include Loblaws, Provigo, Fortinos, Real Canadian Superstore and No Frills. George Weston Ltd. (Toronto symbol WN) owns 46% of Loblaw. In March 2014, the company acquired the 1,250-store Shoppers Drug Mart chain for $12.3 billion in cash and shares. Thanks largely to this purchase, Loblaw’s sales jumped 38.2%, from $30.8 billion in 2010 to $42.6 billion in 2014. Merger savings help pay down debt Earnings rose 13.9%, from $675 million in 2010 to $769 million in 2011. Per-share profits rose at a slower rate of 12.3%, from $2.43 to $2.73, on more shares outstanding. Loblaw’s earnings then fell to $2.25 a share (or a total of $634 million) in 2012 and to $2.23 a share (or $627 million) in…

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