Home meals boost Metro

Article Excerpt

METRO INC., $59.83, is a buy. The stock (Toronto symbol MRU; Shares o/s: 251.8 million; Market cap: $14.8 billion; TSINetwork Rating: Average; Yield: 1.5%; www.metro.ca) lets you tap 950 grocery stores and 650 drugstores, in Quebec, Ontario and New Brunswick. Metro continues to benefit as consumers eat more meals at home during the COVID-19 pandemic instead of going to restaurants. In the three months ended July 4, 2020, sales improved 11.6%, to $5.86 billion from $5.23 billion a year earlier. Same-store sales soared 15.6% at the supermarkets but gained just 1.0% at the drugstores. Metro spent $107 million in the latest quarter on plexiglass barriers and higher wages for its employees due to the pandemic. Despite those added costs, per-share earnings in the quarter gained 20.0%, to $1.08 from $0.90. The stock trades at a reasonable 18.5 times the forecast 2020 earnings. The $0.90 dividend yields 1.5%. Metro Inc. is a buy. buy…