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Ahold Delhaize: Wait For The Discount (Rating Downgrade)

Ellsworth Research profile picture
Ellsworth Research


  • Ahold Delhaize performed well in the last years as its results were buoyed by lockdowns and currency tailwinds.
  • Also, the company worked on the customer journey by further integrating online and offline channels and recognizing trends in consumer behavior.
  • Ahold Delhaize has shown consistent dividend increases, share buybacks and an appreciation in stock price, but growth of cash flow lags that of sales and debt.
  • To maintain a relative constant cash outflow due to dividends, it is estimated the dividend increase will be around 4% in 2023, implying a forward dividend yield of 3.6%.
  • Since this is less than the yield on T-bills, and given the current outlook for the macroeconomic environment, consider the stock a ‘Hold’ for now.

Hannaford Supermarket Storefront and Logo

M. Suhail/iStock Editorial via Getty Images

Ahold Delhaize (OTCQX:ADRNY, OTCQX:AHODF) is one of those stocks that can be classified as utterly boring. Admittedly that has not always been the case. Long term investors will surely remember the consternation arising from the U.S. Foodservice

This article was written by

Ellsworth Research profile picture
European DGI with a background in engineering and data analysis.Through SA I share the research upon which I base my personal investment decisions. In this regard my articles should not be interpreted as investment advice, but rather as an opinion. In the process of gathering information about a certain stock I encourage readers to consider opinions of different writers, preferably with opposing views as part of the due diligence process.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of ADRNY either through stock ownership, options, or other derivatives. 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (6)

Thanks for the interesting article. But what I am missing, not only now with Ahold Delhaize but also for other giants in the retail business. In fact the food business.
How they solved the Inflation problem in organisation, turnover and profit planning, in assortment planning and especially in customer approach.
I live in the Netherlands and what I noticed in the Dutch and German retail was that even the Disounters like Lidle and Aldi with a smaller assortment are quite helpless.
Ellsworth Research profile picture
@Peter Peeters - old overall the US part of the business, where the majority of turnover is generated, has performed quite well. On top of this the dollar tailwind supported the bottom line. This 'international effect' is not visible in your local supermarket, but may explain the discrepancy between your observations and the results of the company.
DG&MoS profile picture
I think this analysis is spot on, thank you! After the last earnings release I came to the same conclusion. Everything is going right except for FCF growth. I do think the company is very well managed. And I hope they come up with a solution soon. I think this would result in some nice appreciation.
If it wasn’t for the high paying T-bills I would give the stock a buy but the T-Bills are just too good right now. So it’s a hold for me too. If it drops to €26-28 I am buying again. Owning it in uncertain times still has me sleeping like a baby.
Ellsworth Research profile picture
@DG&MoS They have a new CFO coming in, let's see what she can do for the cash flow.
Is KR a much better long play than ADRY? Thanks for your views.
Ellsworth Research profile picture
@kalu0003 to be frank I have not looked into the data of KR. Therefore I can't comment.
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