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Highlights
- Coles Group (COL) posts steady 5-year CAGR of 9.8%
- Total Shareholder Return outpaces share price gains due to dividends
- Recent momentum reflects improving investor sentiment
Coles Group (ASX:COL), one of Australia’s leading supermarket operators and a key constituent of the ASX200 stocks, has delivered a compounded annual growth rate (CAGR) of 9.8% in total shareholder returns (TSR) over the past five years. While this may not make headlines for outsized gains, it highlights resilience and income-generating potential for long-term investors.
Share Price vs Total Shareholder Return
Over the past five years, Coles Group's share price has increased by around 33%. Though this underperforms broader market benchmarks, including other ASX200 peers, it doesn't tell the full story. When factoring in dividends and other shareholder distributions, the total shareholder return climbs to a more notable 60% over the same period. This distinction is key, especially for income-focused strategies where dividends play a crucial role.
The past year has been particularly noteworthy, with Coles delivering a total shareholder return of 34%, aided by dividend payouts and positive investor sentiment. The price alone rose by approximately 29% in this period, suggesting that recent developments are being well received by the market.
Fundamentals: Growth vs Profitability
Coles Group’s earnings per share (EPS) have seen a slight decline at an annualised rate of 1.4% over five years, indicating that profits haven't grown in tandem with its share price. However, revenue has grown steadily at an annual rate of 3.2%, which could point to a reinvestment approach — possibly prioritising infrastructure, innovation, or operational scalability over immediate bottom-line profits.
This trade-off often reflects a long-term strategy, where businesses in competitive sectors aim to solidify their market position rather than chase short-term profitability.
What It Means for the Broader Picture
While the company’s earnings trajectory hasn’t dazzled, its ability to deliver consistent shareholder returns — particularly through dividends — underlines Coles' value in a diversified portfolio. As part of the ASX200 stocks, Coles remains a significant player that offers steady exposure to Australia’s retail and consumer sectors.
Coles Group's recent TSR rebound suggests potential tailwinds, and ongoing focus on operational strength may continue to support its standing among ASX200 constituents. The combination of modest capital appreciation and reliable dividends could continue to attract those seeking balance between growth and stability in a blue-chip framework.
