Supermarket operators have a tough job navigating fierce competition, thin profit margins and volatile food prices.
ButKroger ( KR ), 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 each year.
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.
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