Two top consumer sector buys

Article Excerpt

LOBLAW COMPANIES $66.80 (Toronto symbol L; Shares outstanding: 412.4 million; Market cap: $27.6 billion; TSINetwork Rating: Above Average; Dividend yield: 1.5%; www.loblaw.ca) is Canada’s largest food retailer, with about 1,200 supermarkets. Its banners include Loblaws, Provigo, Fortinos, Real Canadian Superstore and No Frills. George Weston Ltd. (see below) owns 46% of the company. In the three months ended October 10, 2015, Loblaw earned $408 million, or $0.99 a share, up 10.0% from $371 million, or $0.90, a year earlier. Sales rose 2.5%, to $13.9 billion from $13.6 billion. Excluding gasoline, same-store sales rose 3.1% at Loblaw and 4.9% at the 1,300-store Shoppers Drug Mart chain, which the company bought for $12.3 billion in March 2014. Loblaw continues to integrate its operations with Shoppers Drug. It expects these moves to save it at least $222 million in 2016. Savings from the acquisition are also helping Loblaw repay the money it borrowed to buy Shoppers. The company ended the latest quarter with…

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