Loblaw can still go higher for investors

Article Excerpt

Thanks to more people eating at home due to COVID-19, Loblaw’s shares recently hit a new all-time high of $113. Even though the economy is re-opening, we expect the company will continue to benefit from its shift to a pure-play retailer and from strong consumer demand for pandemic-era services such as home delivery. LOBLAW COMPANIES LTD. $113 is a buy. The retail giant (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 339.1 million; Market cap: $38.3 billion; Price-to-sales ratio: 0.7; Dividend yield: 1.3%; TSINetwork Rating: Above Average; www.loblaw.ca) is Canada’s largest food store operator, with 1,096 supermarkets. Those stores operate under a variety of banners including Loblaws, Zehrs, Provigo, Real Canadian Superstore and No Frills. Franchisees operate about half the locations. The company’s investors also continue to benefit from its March 2014 acquisition of Shoppers Drug Mart for $12.3 billion in cash and shares. That chain now includes 1,342 drugstores across Canada. Another positive for investors was the 2018 transfer of Loblaw’s stake in Choice…