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Summary
- Dollarama sales increased by 12.3 per cent year-over-year (YoY) in the third quarter of FY21. It pays a quarterly cash dividend of C$ 0.047 per stock.
- Dollarama stocks are up nearly 23 per cent YTD.
- Metro’s sales surged 7.4 per cent YoY in Q4 FY20.
- Metro distributes a quarterly dividend of C$ 0.225 per share.
The COVID-19 pandemic has hammered the consumer sector for months. But this essential segment is slowly bouncing back with better gains vis-à-vis other sectors. The S&P/TSX Capped Consumer Staples Index has yielded almost 6 per cent returns year-to-date (YTD). In comparison, the benchmark TSX composite index is down 3.32 per cent in the same time frame.
Amid the upcoming holiday season and ongoing COVID-19 restrictions, grocery continues to be one the essential elements that people have been hoarding.
Dollarama Inc. (TSX:DOL), one of the leading grocery players of Canada, reported a robust third-quarter result for the fiscal year 2020, on December 9. The company posted a double-digit rise in sales, strong same-store sales growth, and an industry-leading gross margin, stated Dollarama President and CEO Neil Rossy. The company also distributed a gratitude bonus to its employees for their work throughout the pandemic.
Retailer Metro Inc. (TSX:MRU) also saw double-digit food same-store sales growth in the fourth quarter of fiscal 2020.
Let us explore how their strong financial performances are impacting their stock developments:
Dollarama Inc. (TSX:DOL)
Current Stock Price: C$ 55
The company registered sales of C$ 1,064.2 million in the third quarter of FY21, up 12.3 per cent year-over-year (YoY). Its EBITDA grew by 14.2 per cent YoY to C$ 312.1 million in Q3 FY21. The company provides a quarterly cash dividend of C$ 0.047 per stock.
Stocks of the consumer giant have surged nearly 23 per cent YTD. In the last three months, the retailer stocks have increased by nearly 11.5 per cent and by over 12 per cent in the last one month.
The stock’s price-to-cashflow ratio is 18.20, and its price-to-book (P/B) ratio is 148.64. The company has a current market cap of C$ 17.11 billion. Its present earnings per share stand at C$ 1.75, as per the TMX data.
Dollarama made it to TMX’s ROE leader stocks by offering a return on equity at over 16,074 per cent, added TMX data. The grocer ranks among TMX’s Top consumer goods firms that have outperformed their peers with the largest price gains across the TSX and TSXV in the last 30 days.
Metro Inc. (TSX:MRU)
Current Stock Price: C$ 59.56
Metro Inc., one of the largest grocers in Canada, posted sales of C$ 4,143.6 million in Q4 FY20, an increase of 7.4 per cent YoY. The retailer reported net earnings of C$ 186.5 million in Q4 FY20, 11.4 per cent growth YoY. It also holds a quarterly dividend of C$ 0.225 per share.
Retailer firm stocks have returned over 10 per cent gains YTD. Metro stocks have improved by nearly 4 per cent in the last six months.
Consumer firm stocks offer a return on equity of 12.80 per cent and a return on assets of 6.34 per cent. Its current price-to-cashflow ratio stands at 12.70, and its P/B ratio is 2.465. Its present market cap is C$ 14.91 billion. Its earnings per share are C$ 3.08, as per the TMX data.
