The grocery retail sector struggled with volatility in 2017 and 2018 as investors were anxious about the entrance of e-commerce giant Amazon.com into the hyper-competitive space.
Fortunately, Canadian grocery retailers still had time on their side and wisely invested in e-commerce shopping options of their own. This forward-thinking approach has been positive for some grocery stocks in 2019, even with soft inflation ramping up competition.
Metro (TSX:MRU) is a Quebec-based grocery retailer that also boasts a significant footprint in Ontario. Shares of Metro have climbed 23.5% in 2019 as of late afternoon trading on September 9.
In the third quarter of 2019 sales were up 13.8% year-over-year to $4.6 billion and adjusted net earnings climbed 11.1% to $183.4 million. Food same-store sales rose 2%, which is an impressive result in the face of industry headwinds.
The company declared a quarterly dividend of $0.18 per share, which represents a modest 1.3% yield. Metro is a bit pricey today with a P/E ratio of 22 and a P/B of 2.5.
Loblaw (TSX:L) stock has climbed 22.4% in 2019 so far. The largest grocery retailer in the country saw its revenue increase 2.9% year-over-year in the second quarter 2019 to $11.13 billion.
Adjusted EBITDA surged 39.9% from the prior year to $1.17 billion. However, food retail sales growth was down marginally from the previous year.
Shares are also in pricey territory with a P/E of 40 and a P/B of 2.4. The stock offers a quarterly dividend of $0.315 per share, representing a 1.7% yield.
