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3 retail shares that could make a good buy-and-hold

While retail shares are often maligned for their lack of competitive position (did someone say Amazon?) and vulnerability to fast-changing consumer tastes, some very strong performers over the past 5 years have been retail shares.

Here are 3 that have a track record of performance and could keep on delivering for shareholders:

JB Hi-Fi Limited (ASX:JBH)

Operating in the fast-moving consumer electronics space, JB Hi-Fi has not just survived, it has thrived and outlasted many of its competitors including Clive Peeters, Dick Smith, and WOW Sight and Sound. The result has been attractive growth in profits over the past 5 years and JB shows no sign of slowing down.

While the industry remains highly competitive, new ventures in homewares, the strength of the JB brand, and the modest price place the company in an advantageous position for the future.

Collins Foods Ltd (ASX:CKF)

Judging by the results of Collins’ 180 KFC franchises, the fried chicken recipe must indeed be finger-lickin’ good. Collins’ strategy of acquiring KFC restaurants and improving their operations has been successful at driving the company’s earnings higher over time. Collins continues to acquire restaurants including several in western Europe, while also focussing on the growth of its Sizzler franchise in Asia (the Australian operations unfortunately appear in terminal decline) and its nascent Snag Stand business.

Collins carries medium levels of debt and appears to grow predominantly through acquisition, which makes it important not to overpay. Collins appears fairly priced in my opinion.

Greencross Limited (ASX:GXL)

This vet and pet retailing business is attempting to consolidate part of the fragmented industry – currently it owns around 6%. Greencross is doing this through a variety of initiatives including acquiring new businesses, co-locating its vets inside its retail stores, investing in own-brand products, and more. So far the results speak for themselves, and Greencross now appears to be in a position where it can self-fund its growth going forwards, instead of relying heavily on debt like it did previously.

Although growth is expected to be more modest in future, Greencross’ business could become significantly larger over the next decade.

A Big, Fat, Fully Franked Dividend

This company's dividend is almost the stuff of legends. Since it started paying dividends in 2007, it has increased its payout to shareholders every single year, a run that includes 21 consecutive dividend increases.

Based on the last 12-months of dividends, its shares are currently offering a fully-franked 4.8% yield, which grosses up to almost 7% when those franking credits are included. And in stark contrast to the likes of Commonwealth Bank and Telstra, this company just increased its dividend by over 13%, and guided for 2017 profits to grow by 20%!

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Motley Fool contributor Sean O'Neill has no position in any stocks mentioned. The Motley Fool Australia owns shares of Greencross Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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