Loblaw gains from narrower focus

Article Excerpt

Loblaw’s shares have jumped 44% since the start of 2021, and recently hit a new all-time high of $92.00. That’s partly due to a reorganization in 2018 that transferred the company’s real estate business—Choice Properties REIT—to parent George Weston Ltd. The holding company owns 52.6% of Loblaw. The reorganization let Loblaw better focus on its retail business, including expanding its online operations. Those investments helped spur its sales during the onset of the pandemic. The company’s ongoing investments in its popular private-label products, as well as its leading loyalty rewards plan, should continue to push the stock higher. LOBLAW COMPANIES LTD. $92 is a buy. The company (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 338.1 million; Market cap: $31.1 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 1,096 supermarkets. Those stores operate under a variety of banners including Loblaws, Zehrs, Provigo, Real Canadian Superstore and No Frills. Franchisees operate about…