The Woolworths Group Ltd (ASX: WOW) share price has been a strong performer again on Wednesday.
So much so, the conglomerate's shares have just climbed to a multi-year high of $38.17.
When Woolworths' shares reached that level, it meant they had gained an impressive 31% in 2019 excluding dividends.
This compares to a 21% gain by the benchmark S&P/ASX 200 index and a 28% gain by rival Wesfarmers Ltd (ASX: WES).
Why is the Woolworths share price at a multi-year high?
There have been a number of catalysts for Woolworths' strong share price rise in 2019.
One was its solid performance in FY 2019. Woolworths delivered a 3.4% increase in sales from continuing operations to $59.99 billion and a 7.2% lift in NPAT from continuing operations to $1.75 billion.
This was driven by a 3.3% lift in Australian Food sales to $39.57 billion and solid sales growth across the rest of the business.
The good news is that trading conditions have continued to improve in the supermarket industry thanks to the return of rational competition. As a result, investors appear to believe this could mean another positive performance in FY 2020.
In addition to this, news that Woolworths is merging and then spinning off its Endeavour Drinks and hotel and gaming businesses went down well with the market.
Management believes that spinning off these businesses will add value and allow Woolworths to benefit from a simplified organisational structure.
And finally, another catalyst for this share price rise has been the Reserve Bank's cash rate cuts. With the central bank cutting rates down to 0.75%, demand for blue chip dividend shares has been very strong.
Is it too late to invest?
Although I am a fan of Woolworths, I feel its shares are a touch expensive now. Based on analyst forecasts, they are changing hands at 27x full year earnings.
In light of this, I would sooner buy rival Coles Group Ltd (ASX: COL). Its shares can be picked up for a more respectable 24x estimated full year earnings.
