Why I’m Buying Empire Company Today - InvestingChannel

Why I’m Buying Empire Company Today

Grocery retailers have proven to be a very solid investment in this decade. Indeed, these equities were some of the most dependable targets during the COVID-19 pandemic. The aftermath of the pandemic saw soaring inflation, which spurred more food price growth. The 2023 Food Price Report from the Agri-Food Analytics Lab at Dalhousie University projected food price growth between 5% to 7% in 2023.

In February, Canada’s inflation rate hit 5.2% – down from 5.9% this January. Food purchased from stores surged 10% year-over-year in February 2023. That marked the seventh straight month of double-digit food price growth.

Empire Company (TSX:EMP.A) is a Nova Scotia-based food retailer. Some of its top brands include Sobeys, Farm Boy, FreshCo, IGA, and many others. Its shares have been largely static in 2023. However, the stock is down 18% year over year.

The company released its third quarter fiscal 2023 earnings on March 16. In Q3 FY2023, Empire posted sales of $7.48 billion – up from $7.37 billion in the prior year. Meanwhile, gross profit rose to $1.90 billion compared to $1.89 billion in the third quarter of fiscal 2022. In the year-to-date period, Empire delivered sales of $23.0 billion compared to $22.3 billion in the first nine months of fiscal 2022.

Shares of this TSX stock possess a favourable price-to-earnings ratio of 13. Meanwhile, it offers a quarterly dividend of $0.165 per share. That represents a modest 1.8% yield.

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