In my september stock watchlist I talked a little about Ahold Delhaize.
For you that don't know this company, it's a Dutch grocery store company. They have 6,556 grocery stores, mostly in the United States, Belgium and The Netherlands. They make 60%+ of their revenue from the United States. You might recognize some of their names: Food Lion, Stop & Shop, Hannaford, Giant Carlistle, Martin's Food Markets, Giant Landover, and Peapod.
In 2016 they had a revenue of €62.3 billion with an operating income of €2.3 billion, which is an operating margin of 3.7%. Earnings per share came in at €1.17. With an annual dividend of €0.57 this gives us a payout ratio of 48.7%.
This company must have a premium valuation, right? Well, not really... When Amazon (AMZN) announced it would acquire Whole Foods (WFM), the stock price of pretty much every retailer dropped like a brick, including Ahold Delhaize.
The 52-week high of the stock was €21.09, the 52-week low €14.72. The company currently trades for a price of €15.41. That means it's down 26.9% from it's 52-week high.
Based on last years numbers, this means the stock now trades for a P/E of 13.2. The dividend yield sits at a very juicy 3.7%.
Reason enough for me to add to my position! I already owned 75 shares that I purchased for an average price of €21.03 (ouch!). But I had room for some more.
That's why I bought another 125 shares last week for a price of €15.42 per share, for a total of €1,927.50.
With this purchase I now own 200 shares of Ahold Delhaize :).
AD is now the largest holding of my portfolio, having surpassed Cisco (CSCO).
What do you think? Do you also like Ahold Delhaize? Or would you rather go for it's United States competitor, Kroger? Be sure to leave a comment!
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