Supermarket operators have a tough job navigating fierce
competition, thin profit margins and volatile food prices.
), the nation's biggest grocer, has been faring well.
The stock is up 23% this year, more than double the S&P
500. And the dividend yield is 1.9%, almost matching the S&P
average of 2.0%.
Kroger last year boosted its quarterly dividend by 30% to 15
cents a share, or 60 cents annually. The next payout is due June
1 to shareholders of record on May 15. Kroger reinstated its
dividend in 2006 and said it plans to keep raising the payout
The operator of Kroger, Ralphs and Food 4 Less chains reported
last month that profit for the latest quarter jumped 76% on a 13%
increase in sales. Both figures were the best in years.
The company also issued a better-than-expected full-year
outlook, saying business remains strong despite the payroll tax
hike and higher gasoline prices.
Kroger is 18% past a 27.21 buy point from a flat base, putting
it well out of buying range. It's pulled back from a 52-week high
March 28 but isn't flashing any sell signals.
The stock enjoys an IBD Composite Rating of 98, highest in the
22-member supermarket industry group.
Kroger also boasts an Accumulation/Distribution Rating of A,
indicating strong institutional demand for the shares.
Kroger said in March that it's trying to create a loyal
customer base by improving freshness and assortment in perishable
items, strengthening its pharmacy business and engaging shoppers
through mobile phone apps. It said customers downloaded a record
500 million digital coupons in December, while visits to its
mobile site have more than doubled.