The consumer staples is one of the major sectors in the Australian economy. Woolworths, Coles and Wesfarmers are the major players of the consumer staples sector. Let’s take a closer look at the recent updates of these companies.
Woolworths Group Limited (ASX: WOW)
Woolworths Group Limited (ASX: WOW) recently completed its $1.7 billion off-market buy-back, which fulfilled the Board’s commitment to return the proceeds from the Woolworths Petrol sale to shareholders.
The main outcomes of the Buy-Back were as follows:
(Source: Company reports)
In this financial year, the company has already paid $1.4 billion of dividends to shareholders via FY18 final and special dividends, and FY19 interim dividends. Earlier this year, the company appointed highly experienced, Jennifer Carr-Smith to its Board as a Non-Executive Director. The appointment aligns well with the Board’s strategic focus on digital, data and technology, given Jennifer’s extensive career experience at US online businesses, Peapod and Groupon.
In the last six months, the share price of the company increased by 5.90% as on 29th May 2019. The stock of WOW last traded at a price of $31.370, with a market capitalisation of circa $39.64 billion as on 31st May 2019.
Wesfarmers Limited (ASX: WES)
Wesfarmers Limited (ASX: WES) recently entered into a Scheme Implementation Deed (SID) with Kidman Resources Limited (ASX: KDR) to acquire all the outstanding shares in Kidman for $1.90 cash per share by way of a scheme of arrangement. Wesfarmers Limited has a track record of delivering superior long-term financial performance as depicted in the graph below.
Total Shareholder return over past years (Source: Company Reports)
In order to deliver superior returns, WES applies strict criteria and rigorous financial discipline to all its investment decisions. For the past few years, the company has delivered a strong return on capital.
In the first half of FY19, the company reported earning per share of 95.5 cents per share, up 10.5% on the previous corresponding period (pcp).
In the last six months, the share price of Wesfarmers Limited increased by 20.42% as on 30th May 2019. The stock of WES last traded at $37.050, with a market capitalisation of circa $41.91 billion as on 31st May 2019.
Coles Group Limited (ASX: COL)
Australia’s leading retailer, Coles Group Limited (ASX: COL) delivered solid results in the third quarter of FY19. In comparison to the third quarter of FY18, the Supermarket sales grew by 3.2%, and Liquor sales grew by 4.3%. One of the major drivers for the sales growth this quarter was the ‘Fresh Stikeez’ promotional campaign, which drove a high number of customers during the period. The major highlight for Coles during the quarter was ‘Coles Online’, which delivered robust growth.
Third Quarter Sales Results (Source: Company Reports)
After the demerger with Wesfarmers, Coles was listed on ASX in November 2018 and since then, has provided a return of -1.33% as on 29th May 2019. However, in the last three months, the share price of the company increased by 9.91%. The stock of COL last traded at $12.450, with a market capitalisation of circa $16.71 billion as on 31st May 2019.
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