The Coles Group Ltd (ASX: COL) share price printed a record high of $15.79 today as the supermarkets and bottle shop operator attracts investors thanks to its defensive profit and dividend streams.
Coles as a business also continues to perform well with 48 consecutive quarters of same-store sales growth. The September quarter delivered marginal 0.1% same-store sales growth, but 1.6% growth overall when accounting for sales from new stores.
Since it delisted from investment conglomerate Wesfarmers Ltd (ASX: WES) it has paid 35 cents per share in dividends to shareholders. This consisted of 24 cents per share as a final dividend for the six months to June 30 2019 and an additional 11.5 cents per share to cover additional time periods since the demerger.
If we double the final dividend to 48 cents per share the group offers an estimated yield of 3 per cent. Goldman Sachs is forecasting Coles to earn 68 cents per share over FY 2020. That puts it on 23x estimated earnings to suggest it will need to deliver some healthy profit growth to justify this valuation.
