Welcome to my Dividend Farm, Kroger

I walked out of my local Kroger store with three things today: a Lunchable for my kid, a pack of mango LaCroix sparkling water and a small piece of the company.

I’m serious … I literally opened my Robinhood app and bought a share of the grocery chain, my first, while standing in line for the self checkout. I’ve been following the stock for awhile now and, well, Monday’s trip inside was the slight nudge I needed to finally pull the trigger.

Kroger’s a pretty nice place, complete with a decent selection of just about anything you’d need at any given time. In the several years I’ve been a somewhat regular shopper, my area Kroger started selling liquor, added a Starbucks and opened a small Fifth Third Bank branch inside. I, by the way, own shares of both Starbucks (SBUX) and Fifth Third (FITB).

It’s been remodeled, too, and has its own pharmacy and private selection food products.

In summary, the store has a lot going on. I could’ve probably gotten away with just saying that, but figured I’d try and paint more of a picture. I’ve also noticed several Turkey Hill locations – a gas station/convenience store type of place owned by the company – cropping up on intersections around town.

Kroger, at least in my area, is on fire.

The stock, though, has been doing just the opposite. And for what? Because Amazon bought Whole Foods?

Please.

Amazon presents some competition, sure, but it can’t be the best at everything, right? I probably shouldn’t have posed that as a question. I am right. Amazon is great for a lot of things, but Kroger has a lot to offer, too. Amazon just got into the grocery business, a tough business, and people act like it’s already the grocery king.

Please.

Here’s a closer look at the purchase …

Monday’s purchase: 1 share of Kroger for $20.22

So Kroger, complete with the solid foundation I already touched on, is super cheap right now. I like the company and all, but I really like it at $20 a share.

It’s 44.32% off its 52-week high of $36.44. Now that’s a discount. It also has a P/E ratio of just 12.50.

The dividend is decent, too, with a 2.42% yield and low 29% payout ratio. Kroger is growing its dividend to the tune of a 13.71% average growth rate over the course of the last three years.

The numbers aren’t all good – the company has a good amount of debt and hasn’t grown its earnings per share much in the last year – but there’s still a lot to like.

Kroger is the 44th company in my portfolio that pays quarterly dividends in March, June, September and December. The 44 are worth a combined $5,032.91 and produce $143.95 worth of annual dividend income.

I now have a grand total of 132 different companies in my portfolio.

March on!

  • Welcome to the Kroger family! I share your opinion that the Amazon threat is overblown. Kroger is king where I live too but through their Fry’s brand.

    • Steady Saver

      Happy to be a part of the Fam. Have a good one, DD!

  • Steve Killingsworth

    Curious as to what you do with the divy’s you receive. DRIP I assume?

  • Steve Killingsworth

    check out WPG for a BIG yield..

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