When you invest in a share for the long term, it is as if you are entering into a serious relationship. You want reliability. You want growth. And above all you want something that you don’t give a headache every time there is market sound.
That’s what makes LOBLAW companies (TSX: L) A great buy-and-hold shares for long-term investors. It is a company that not only sells groceries and care products. It offers peace of mind to its loyal investors. With a long track record in the field of growing profit, increasing dividends and expanding its footprint in Canada, LOBLAW checks all the right boxes for anyone looking for a reliable compounder that you can hold for tens of years.
In this article I will explain why Loblaw could be a TOP TSX stock to buy today and just keep it thick and thin.
A beautiful TSX stock that you have been able to hold on for decades
As the largest supermarket and fancier chain in Canada, LOBLAW has more than 2,800 locations and a presence in everything, from food and health to fashion, financial and mobile services. At the time of writing, the shares act at $ 222.19 per share and has a market capitalization of $ 66.6 billion. It pays a small but increasing dividend every quarter and currently produces slightly more than 1%.
One of the most important factors that has made these buy-and-hold shares even more attractive is the stable performance. Interestingly, Loblaw shares have risen by more than 32% in the past year and almost 221% has risen in the last five years.
Improving profitability supports trust in the long term
In the last quarter ending in June, the company achieved an increase of 5.2% JOJ (year-on-year) in its total turnover to $ 14.67 billion with the help of higher customer traffic, larger mand grottes and new store openings. The turnover in the same store for the quarter also climbed 3.5% yoj in food stores and 4.1% in the drug shop segment.
Last quarter, Loblaw’s discount banners such as no frills and real Canadian Superstore performed better than customers looking for value in a cheap environment. In the meantime, the pharmacy and health care services also performed well, with a sale of in the same store with 6.2% yoJ because of a strong demand for specialist recipes.
The Bottom Line from Loblaw is just as impressive as the top line. In the last quarter, the adapted net profit of the company increased by 8.6% yoj to $ 721 million. The adapted EBITDA of the company (profit before interest, taxes, depreciation and amortization) also climbed 7.4% from a year ago to $ 1.84 billion, while the adapted EBITDA margins remained stable at 12.5%.
Why LOBLAW stock was built for the long term
What Loblaw really makes a great buy-and-hold shares is not only what the company does today, but what it works consistently for the future. The company intends to be planning this year in particular to open around 80 new stores and 100 pharmacy clinics this year. So far it has already opened 20 stores and 23 clinics. On the better side, it also increases automation in the new distribution center of East Gwillimbury to improve efficiency, which should lead to better profitability.
And with a fresh 4-for-1 stock split in August, Loblaw shares becomes even more accessible for retail investors. All these positive factors make LOBLAW a top stock to buy today and just hold for decades.
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