Kroger: Merger With Albertsons A Strong Catalyst

Nov. 22, 2022 4:16 PM ETThe Kroger Co. (KR)BRK.A, BRK.B, ACI2 Comments
Yannick Frey profile picture
Yannick Frey
1.03K Followers

Summary

  • The Kroger Co. raised its full-year expectations, expecting identical sales excluding fuel to grow 4% to 4.5% YoY.
  • The Albertsons merger is very favorable for Kroger shareholders because of its price, synergy benefits, and geographic sales diversification.
  • Even if the merger fails, Kroger remains an attractive stock that I like to see in my portfolio.
  • The dividend per share has been growing steadily for years, averaging 13.5% per year over the past 10 years.
  • Kroger's valuation has become favorable and its prospects remain excellent. The company is shareholder-friendly, The Kroger Co. stock is worth buying.

Kroger Delivery van. Kroger is one of the largest grocery store chains in the United States.

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Introduction

The Kroger Co. (NYSE:KR) plans to acquire Albertsons Companies, Inc. (ACI). The merger is an interesting opportunity to allow Kroger to grow its business. The combined company should benefit greatly from synergy and geographic

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Data by YCharts

Key Initiatives Drive Strong Q2 Results - 2QFY23 Investor Presentation

Key Initiatives Drive Strong Q2 Results (2QFY23 Investor Presentation)

Sales of the leading food and grocery retailers in the United States in 2021 (in billion U.S. dollars)* - Statista

Sales of the leading food and grocery retailers in the United States in 2021 (in billion U.S. dollars)* (Statista)

Dividend Growth History - KR Seeking Alpha Ticker Page

Dividend Growth History (KR Seeking Alpha Ticker Page)

Krogers' Free Cash Flow Highlights - SEC and Author's Own Calculation

Krogers' Free Cash Flow Highlights (SEC and Author's Own Calculation)

Chart
Data by YCharts

Chart
Data by YCharts

Earnings Estimates - KR Seeking Alpha Ticker Page

Earnings Estimates (KR Seeking Alpha Ticker Page)

This article was written by

Yannick Frey profile picture
1.03K Followers
Yannick is a passionate investor from the Netherlands who shares his analyses with other investors on Seeking Alpha. In doing so, he looks for companies with the following characteristics:1. Companies that are growing in both revenue, earnings and free cash flow.2. Companies that have excellent growth prospects.3. Stocks with favorable valuations.He prefers steadily growing companies with high free cash flow margins, dividend stocks and stocks with generous share repurchase programs.Disclaimer: My articles do not provide financial advice, they reflect my own findings and insights.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in KR over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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