Out-of-favour supermarket behemoth Woolworths Limited (ASX: WOW) appears to be back on the radar of investors with its shares rising 2.6% to $28.84 today. This represents a gain of 74 cents per share.
That compares to a 1.4% gain for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) and a 1% rise for Wesfarmers Ltd (ASX: WES), the owner of the Coles supermarkets. Woolworths has come under considerable selling pressure over the last 12 months as the stock dropped 24% in that time.
While investors have become increasingly concerned about the cash being pumped into its struggling Masters Home Improvement chain, others are worried about its ability to continue competing with Coles, as well as the new market entrants Aldi and Costco.
However, with the stock now trading near its lowest level in more than two years, investors who buy today could be getting themselves an absolute bargain in an otherwise expensive market. With a defensive (and extremely consistent) revenue stream, together with a forecast 4.8% fully franked dividend yield, Woolworths could be one of the best stocks you buy this year. If you like Woolworths' dividend, you'll love this…